Spotify: Q2 Strengthens The Long Term Story

Kenio Fontes 3.02K Followers Follow Summary Spotify Technology S.A. delivered strong Q2 results, driven by robust MAU growth and effective monetization strategies, including AI and advertising scale. Premium subscribers exceeded guidance with 7 million net additions, supporting 14% YoY revenue growth and a 7% YoY increase in premium ARPU (FX neutral). Ad business momentum accelerates, with auction-based ads now 40% of the mix and ad revenue growing 30%, enhancing top line visibility. Operating leverage is improving, though stock-based compensation grew 18% YoY and warrants monitoring; SPOT remains a buy on compounding potential despite competitive risks. stockcam/iStock Unreleased via Getty Images Since my last analysis on Spotify Technology S.A. ( SPOT ), the stock is down around 6%. In this last article, I upgraded the rating due to the better margin of safety. Q2 pretty much reinforces This article was written by Kenio Fontes 3.02K Followers Follow Equity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free to reach out for collaborations or to connect! Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.