Spotify’s finally turning its user growth into serious cash flow

4/24/24 11:17AM

Record profits

The world’s biggest music streaming platform posted one of its best financial quarters ever yesterday. Spotify’s gross profit hit €1bn (~$1.08bn) for the first time in the company’s 18-year history, as revenues jumped 20% and the company printed more than €800m in free cash flow for the last 12 months.

Those headline figures sent shares up more than 11% and impressed Spotify investors — who had once been growing weary of the streamer’s years-long struggle to turn a profit — but, not everything in the report was music to their ears. Its user count, for example, didn’t soar quite as much as expected, even with monthly actives rising 19% year-over-year and paid subscribers climbing a more gentle 14% in the same period.

Let the music do the talking

Co-founder and CEO Daniel Ek was quick to nod to the impact that December staff cuts, which saw ~1,500 workers lose their jobs, have had, telling investors that the layoffs disrupted day-to-day operations “more than [they] anticipated”. However, another proposed round of price hikes could help keep profits healthy, with premium subscriptions set to rise by $1-2 in several markets this month, and in the US later this year.

Whether all of Spotify’s 239 million paid subs will stick around through the rise, the second in as many years, is another question entirely. Ek and other execs will be hoping that the streamer's continued global rollout of audiobook offerings, as well as its expanding range of AI features, will be enough to mollify cost-centric complainers.

Go deeper: Can streaming save the music industry?

Nia Warfield10h

Starbucks issues apology after viral “Bearista” cup meltdown

Holiday cheer turned into chaos this week for Starbucks after the coffee giant’s new “Bearista” holiday cup sent fans into a frenzy.

Dropped alongside its 2025 holiday menu, the $30 beanie-wearing glass bear tumbler sparked long lines, sellouts, and even in-store scuffles before Starbucks stepped in with an apology.

“The excitement for our merchandise exceeded even our biggest expectations,” the company said in a statement to People. “Despite shipping more Bearista cups to our coffeehouses than almost any other item this holiday season, the Bearista cup and some other items sold out fast.”

Within hours of launch, frustrated fans flooded Starbucks’ social media pages and even store hotlines. Some customers waited in line before dawn and others said their stores received only a handful of cups. In one Houston location, the craze even turned physical, with police reportedly called to break up a brawl. Meanwhile, the cup is already reselling on sites like eBay, with listings topping $600.

“We understand many customers were excited about the Bearista cup and apologize for the disappointment this may have caused,” Starbucks said. While in-store customers may be upset, investors seem happy about the viral hit, as the stock has risen over 3% on Friday.

If you’re still hoping for a Bearista at market price, that may not be on order: the chain didn’t disclose how many cups were made or whether a restock is planned.

Hyunsoo Rim11h

Target tells workers to smile, wave, and greet shoppers if they come within 10 feet of them

Target just rolled out a new rule for store employees: “smile, make eye contact, and greet or wave” when a shopper comes within 10 feet — and if they get closer, within four feet, “ask whether they need help or how their day is going,” according to a new Bloomberg report.

Dubbed the “10-4 program” internally, the rule mirrors rival Walmart’s own 10-foot policy, formalizing behavior Target had previously only encouraged.

Target Mandates Worker Smiles, Friendliness to Boost Sales

Hyunsoo Rim

LIMITED LIFE COMPANY

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Half of new US companies disappear within 5 years — and only 1 in 3 makes it to year 10

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Monster surges on energy drink buzz, while Celsius sinks on distribution concerns

Shares of Monster Beverage climbed 5% after the bell on Thursday, and held most of those gains into early trading on Friday, following strong Q3 results.

The energy drink giant topped market expectations, with quarterly sales up 17% year over year to $2.2 billion and adjusted net profits growing 41% to $524.5 million — 11% ahead of Wall Street’s estimates. In the report, Monster highlighted its zero-sugar line and new product launches, with a stack of novel flavors already released this year, as bright spots.

During a call with analysts, Chief Executive Hilton Schlosberg said that the global energy drink category “remains healthy with robust growth,” The Wall Street Journal reported, adding that demand for more affordable caffeinated drinks is rising as coffee has become “really expensive.”

Meanwhile, rival beverage business Celsius saw shares fall as much as 23% on its Q3 results yesterday — despite beating expectations, with revenue jumping 173% — largely due to concerns about a change in the company’s distribution channel, as its newly acquired Alani Nu brand joins the PepsiCo distribution network.

Millie Giles

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