The audio streaming company, Spotify Technology SA (SPOT.N), on Wednesday said it expects to reach $100 billion revenue annually in the next 10 years and promised high-margin returns from its costly expansion into podcasts and audiobooks.
Shares of the company rose 6.5% on Wednesday after losing 53% of its market value so far in 2022, worse than the 24% drop in the S&P 500 communication services sector index (.SPLRCL), which includes Spotify and other media and social network companies.
The company hosted its first investor day since going public in 2018, hoping to stoke Wall Street’s enthusiasm despite the slowing global economy.
To reach its ambitious goal, Spotify would need to make its revenue grow nearly 10-fold from 2021 revenue of $11.4 billion, and Chief Executive Daniel Ek also forecast gross margins to jump to 40% and operating margin to 20% in the same time.
“Spotify will put out these pretty audacious targets and we are going after these because that’s how we see the world and we are going to invest behind that,” Daniel Ek said.
