SPOT Delivers a Big Earnings Win – and It Won’t Be the Last

Spotify (SPOT) shares surged Tuesday morning after a compelling fourth-quarter earnings report — just as we predicted it would.

The music streamer achieved its first full year of profitability, reporting a net income of €1.14 billion for 2024, a significant turnaround from a loss of €532 million in 2023.

Spotify’s Key Growth Drivers:

• User Expansion: Monthly Active Users (MAUs) increased by 12% to 675 million, marking the strongest fourth quarter in the company’s history.
• Subscription Growth: Premium subscribers grew by 11% to 263 million, surpassing expectations.
• Price Adjustments: Strategic subscription price increases in various regions, including the U.S., contributed to revenue growth without significantly impacting customer retention.
• Cost Management: The company implemented cost-control measures, such as workforce reductions and streamlined podcast investments, enhancing profitability.

Massive turnaround indeed. One we saw coming.

We laid out the bullish case for SPOT in our January 17 issue: LikeFolio data showed Spotify global web traffic hitting all-time highs in December, telling us demand was on the rise. Consumer search trends suggested strong interest in “Spotify premium” subscriptions, while cancellations remained flat. Our call was spot on.

The results speak for themselves – and point to a larger investment trend that we can play to our advantage…

Spotify’s AI Earnings Boost

Spotify turned the corner on user growth and profitability by leveraging artificial intelligence (AI) in all the right ways.

The company reduced operating expenses by using AI to automate content moderation, optimize ad targeting, and streamline backend operations. Instead of relying on manual oversight for podcast investments, AI-driven insights helped identify underperforming content, cutting costs while maintaining high-value offerings. Much lower headcount. Much higher value.

AI-powered analytics allowed Spotify to refine its subscription model by segmenting users more effectively. By analyzing listening habits and engagement trends, Spotify introduced new premium tiers tailored to different user groups, such as superfans and audiophiles. AI also played a role in strategic price hikes, ensuring that increases were implemented in markets where users were least likely to churn.

Spotify’s AI-driven personalization became a core product differentiator. Features like AI-generated playlists, improved Discover Weekly recommendations, and the AI DJ deepened engagement, keeping users locked into the platform. By dynamically adjusting content curation, AI ensured that users found more of what they loved, boosting retention and lifetime value.

For us, Spotify’s earnings blowout confirms the market is STILL underestimating big tech, particularly when it comes to AI.

Keep an Eye on This Trend

AI advancements are taking digital products (like Spotify) to near-perfection in terms of user experience and advertising targeting, boosting retention, ad revenue, AND marketing effectiveness.

Netflix (NFLX) became a poster child for this a few weeks back – AI helped the streamer deliver 16% year-over-year revenue growth, 19 million net new paid subscribers, and a substantial 52% year-over-year boost to operating income in the fourth quarter. (Yet another massive earnings call we got right, thanks to LikeFolio’s predictive insights.)

We’re excited to see how AI will continue to drive earnings – and profits for our readers – in 2025.

Stick with us, and we’ll keep you ahead of the game, just like we did with Spotify and Netflix.

Better yet, join Earnings Season Pass, and instead of making 16% on NFLX in 20 days simply buying shares, you could’ve doubled your money and then some for a 112.77% windfall in just three days.

The secret to those turbocharged Earnings Season Pass profits is a handful of curated trading strategies, hand-selected by Landon and I, that allow us to take on an appropriate, clearly defined (and limited) amount of risk.

Get in on Monday, get out by Friday, and get paid. Over and over again. That’s the idea. And those are the trades we make all earnings season long, four quarters a year, in Earnings Season Pass.

We’ll show you how it works here – and how you can get started today.

Until next time,

Andy Swan
Founder, LikeFolio

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