While music has a 28% gross margin, podcasting’s gross margin is -57%. The company still sees itself primarily as a music service and music is the cornerstone to its platform, but - as it detailed throughout the presentation - the larger opportunity is being an audio company that provides both music and non-music content in a single product.Ĭurrently, however, podcasts are a financial drain on the company. To achieve this, rather than music Spotify executives focused on non-music content such as podcasts, and audiobooks to a lesser degree. All three measures would be a significant leap from its 2021 financial performance of $10.9 billion revenue with 28% gross margin and 1% operating margin.

More importantly, Ek laid out how they intend to reach the lofty goals of $100 billion in annual income with 40% gross margin and 20% operating margin.

The Ledger: Three Major Trends Revealed in Music Companies' Q1 2022 EarningsĪs CEO, Ek’s job on Wednesday was to captain the nearly four-hour presentation communicating to investors just how exactly Spotify has been misunderstood.

Annual spotify plans