Spotify has been an absolute monster stock
$Spotify Technology S.A.(SPOT)$ has been an absolute monster stock the last 2 years, but there's more growth ahead.
1.Premium
Since 2018, the premium business has grown at a 20% CAGR with gross profit growing at a 22% CAGR. Price increases and improved operating margins will keep both growing.
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2.Ad-Supported
The 10x opportunity for Spotify isn't growing premium, it's ads. 393 million of the company's 626 million monthly active users are on an ad-supported tier. While ad revenue has grown at a 24% CAGR, the business isn't consistently profitable.
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If the ad CAGR can continue at 24% for a decade, Spotify could get to $15.4 billion in revenue. A 30% gross margin would be $4.6 billion in margin.
Can Spotify get there? It's a tough task, but watch podcasts and video as a key driver of growing ad revenue.
https://x.com/TravisHoium/status/1835641447309037751
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