Spotify expects to reach $100B in revenue within a decade
Speaking at Spotify's first investor day, CEO Daniel Ek said the company sees podcasting and audiobooks as high margin areas that will drive growth over the next decade.
hosted its first investor day this week since going public in 2018, and promised the grand target of $100 billion in revenue within the next ten years. In 2021, the audio streaming platform made $11.4 billion in revenue.
According to Reuters, CEO Daniel Ek said that Spotify sees growth coming from its huge investments in podcasting and audio, with both segments predicted to have large margins by the end of the decade.
The company has spent $1 billion on podcasting investments so far with the the belief the industry will soon be worth $20 billion. Spotify's podcasting revenue in 2021 was $215 million.
Ek said that he believes podcasting margins will be between 40 to 50 percent, while audiobook margins will be over 40 percent. There was no timeline specified to reach those numbers. At the moment, Ek said the two divisions had a "better than you probably expect" margin of 28.5 percent already.
Engineering manager Alexander Nordstrom said that Spotify is also looking to enter new types of content apart from music, podcasts, and audiobooks, in the coming years. Nordstrom claimed the company was well on its way to hitting one billion users by 2030.
Upon announcement of the ambitious targets at the investor day, Spotify's share price jumped 6.5 percent. However, the company's stock is still nearly 50 percent down on its year-to-date price.
Edited by Megha Reddy