Breaking Down Spotify’s Q1 Earnings Report

Spotify Technology S.A. SPOT will reveal its first-quarter 2024 results on Apr 23, before the bell.

What to Expect

Earnings have had a bumpy ride, missing estimates in three of the last four quarters. The average negative surprise has been a hefty 62.5%.

Q1 Projections

The company is anticipated to post revenues of $3.88 billion for the quarter, representing an 18.9% increase year-over-year. This uptick is attributed to growth in subscribers, monthly active users, and average revenue per user.

The estimated earnings per share (EPS) is 66 cents, marking substantial progress from the $1.24 loss per share reported in the same quarter last year. The quarter is expected to spotlight strong margins in the podcasting segment.

Analysis and Forecast

Though our model doesn’t definitively project an earnings beat for Spotify this time, the confluence of a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 typically hints at an earnings surprise. Unfortunately, this is not the scenario here. Spotify currently holds an Earnings ESP of -35.48% alongside a Zacks Rank of 3.

Promising Stock Options

Exploring the business services sector, WEX and Trane Technologies emerge as potential contenders for exceeding earnings expectations this quarter.

WEX is estimated to report quarterly revenues of $653.6 million, a 6.8% surge compared to the previous year. Earnings per share are projected at $3.5, indicating a 4.2% increase.

Trane Technologies, on the other hand, anticipates revenues of $4 billion, an 8.8% rise year-over-year. Estimated EPS is $1.6, suggesting a 16.3% improvement from the same quarter last year.

Both companies have shown favourable Earnings ESP and a Zacks Rank of 3. WEX is set to disclose its results on Apr 25, while Trane Technologies is scheduled for Apr 30.

Keep track of upcoming earnings announcements through the Zacks Earnings Calendar.