Spotify Technology S.A. SPOT shares are trading higher Wednesday following the company's investor day presentation.
Spotify provided investors a sense of reassurance during the presentation, highlighting its growth potential and monetization approach, as well as its differentiation from its competition. The music streaming company largely turned its focus to new product developments.
"Our expertise in audio personalization is truly unmatched and we have already begun to apply it to podcasts," said Daniel Ek, founder and CEO of Spotify.
Podcasts have hurt the company's gross margins in the short term, but Spotify is confident that the product has 40% to 50% gross margin potential.
"But importantly, we aren’t planning to stop there. We see the opportunity to continue to imagine and explore new verticals across our platform—within audio, but also beyond," Ek said.
The Spotify CEO noted that the company plans to "shoot for the stars" both literally and figuratively.
"I believe that over the next decade, we will be a company that can generate $100 billion in revenue annually, and that we can achieve a 40% gross margin and a 20% operating margin," Ek concluded.
SPOT Price Action: Spotify shares have traded between $305.60 and $89.03 over a 52-week period.
The stock was up 6.01% at $115.98 at press time, according to data from Benzinga Pro.
Photo: Andrzej Nowak from Pixabay.
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