Spotify Technology (Spotify Technology) Gross Margin % : 27.61% (As of Mar. 2024)

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What is Spotify Technology Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Spotify Technology's Gross Profit for the three months ended in Mar. 2024 was $1,091 Mil. Spotify Technology's Revenue for the three months ended in Mar. 2024 was $3,952 Mil. Therefore, Spotify Technology's Gross Margin % for the quarter that ended in Mar. 2024 was 27.61%.

The historical rank and industry rank for Spotify Technology's Gross Margin % or its related term are showing as below:

SPOT' s Gross Margin % Range Over the Past 10 Years
Min: 11.65 Med: 25.46 Max: 26.8
Current: 26.26

During the past 9 years, the highest Gross Margin % of Spotify Technology was 26.80%. The lowest was 11.65%. And the median was 25.46%.

SPOT's Gross Margin % is ranked worse than
88.31% of 522 companies
in the Interactive Media industry
Industry Median: 60.98 vs SPOT: 26.26

Spotify Technology had a gross margin of 27.61% for the quarter that ended in Mar. 2024 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for Spotify Technology was -0.10% per year.

Spotify Technology Gross Margin % Historical Data

The historical data trend for Spotify Technology's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Spotify Technology Gross Margin % Chart

Spotify Technology Annual Data

Trend

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Gross Margin %

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25.46

25.57

26.80

24.95

25.64

Spotify Technology Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Gross Margin %	Get a 7-Day Free Trial															25.18	24.11	26.36	26.70	27.61

Competitive Comparison of Spotify Technology's Gross Margin %

For the Internet Content & Information subindustry, Spotify Technology's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Spotify Technology's Gross Margin % Distribution in the Interactive Media Industry

For the Interactive Media industry and Communication Services sector, Spotify Technology's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Spotify Technology's Gross Margin % falls into.

Spotify Technology Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Spotify Technology's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as

Gross Margin % (A: Dec. 2023 )	=	Gross Profit (A: Dec. 2023 )	/	Revenue (A: Dec. 2023 )
	=	3704.5	/	14446.02
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(14446.02 - 10741.549)	/	14446.02
	=	25.64 %

Spotify Technology's Gross Margin for the quarter that ended in Mar. 2024 is calculated as

Gross Margin % (Q: Mar. 2024 )	=	Gross Profit (Q: Mar. 2024 )	/	Revenue (Q: Mar. 2024 )
	=	1091.3	/	3952.174
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(3952.174 - 2860.87)	/	3952.174
	=	27.61 %

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.

Spotify Technology (NYSE:SPOT) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Spotify Technology had a gross margin of 27.61% for the quarter that ended in Mar. 2024 => Competition eroding margins

Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.

Spotify Technology Gross Margin % Related Terms

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Spotify Technology (Spotify Technology) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Interactive Media » Spotify Technology SA (NYSE:SPOT) » Definitions » Gross Margin %

Comparable Companies

Traded in Other Exchanges

SPOT:Mexico 1SPOT:Italy 639:Germany 639:Germany S1PO34:Brazil SPOT:Austria

Address

5, Place de la Gare, Luxembourg, LUX, L-1616

Website

https://www.spotify.com

Spotify, headquartered in Stockholm, Sweden, is one of the world's largest music streaming service providers, with 489 million total listeners. The firm monetizes its users through a paid subscription model, referred to as its premium service, and an ad-based model, referred to as its ad-supported service. Revenue from premium and ad-supported services represented 87% and 13% of Spotify's 2022 total revenue, respectively.