Time will tell which companies will be significantly affected, but right now the market is pricing all these digital businesses as if the coming macroeconomic conditions will severely hurt their financials. Netflix's weak report made a lot of investors nervous about how these companies will fare in a recessionary and/or inflationary environment. Third, consumer internet stocks have been hammered over the last few weeks. The way it plans to monetize these investments is through advertising. Spotify has made over $1 billion worth of investments into podcast content over the last few years. Its results were hindered by the closure of its Russia operations in response to that nation's invasion of Ukraine, but this pattern could be concerning if it continues over the next few quarters. Second, Spotify's advertising-supported revenue growth was a bit weak in Q1 - only 31% year over year. Spotify also called for a 20 increase in revenue to 2.8 billion euros, and an operating loss of 197 million euros, which includes 50.
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Music and podcast streaming platform Spotify, with almost 400 million active users. Were aware of some issues right now and are checking them out Well keep you posted. However, so far, that margin expansion hasn't materialized, and it is likely that many investors are doubting whether those numbers are achievable. Tens of thousands of Spotify and Discord outage reports have been flagged to Down Detector since 6pm UK time. That would help the company finally generate consistent net profits and cash flow. Over the long term, executives think Spotify can achieve gross margins in the 30% to 40% range. Some of the common reasons why Spotify crashes or shuts down unexpectedly are: Your device is set to save battery power, or a storage cleaning program is running.
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Gross margins were 25.2% in Q1, down from 25.5% in the prior-year period. First, Spotify is not seeing any leverage on the gross margin line, though management promised that was coming due to its investments into podcast content and advertising. Three issues may have been driving that negativity.