Barclays Sees 62% Upside In Spotify Post Q1 - Here's Why - Spotify Technology (NYSE:SPOT)

Barclays saw Spotify Technology SA SPOT report total MAUs, premium subs, and revenue in line with consensus.
The 2Q revenue guidance also came in line, but gross margins and OI were missed primarily due to continued core operating improvements across music, podcast, and FX headwinds.
Furthermore, these two factors will likely remain for the next few quarters before lapping/improving in 2023.
Barclays remained Overweight, with a price target of $170 (61.8% upside).
Positives for 1Q: Premium sub revenue was up 23% y/y ex-fx (up from 22% last Q), with both MAUs and ARPU coming ahead of expectations. ARPU growth benefited from a favorable product mix shift and is the last full Q of price increase benefit.
Podcast metrics remained strong, with the share of overall consumption hours reaching a record high once again with consumption rates growing double-digits y/y.
As a result, podcast revenue was likely up triple digits again y/y, while music ad-supported revenue also saw growth from increased impressions and double-digit growth in CPMs.
However, ad revenue decelerated nearly 10pts sequentially and will likely remain ~30% y/y growth in 2Q (was trending mid-30s before Russia's invasion).
Price Action: SPOT shares traded lower by 0.45% at $102.22 on the last check Friday.
Photo by Photo Mix from Pixabay

Barclays Sees 62% Upside In Spotify Post Q1 - Here's Why