At the end of 2022, Spotify (SPOT) stock was trading below $80 a share after a disastrous year for investors that erased over $35 billion from the company’s market cap.
Today, shares are trading at just under $500. The audio giant is on track to hit full-year profitability for the first time ever. And its market cap? About $100 billion, up from just $15 billion two years ago.
The company’s colossal run-up in stock price follows an intense business overhaul that’s included everything from mass layoffs and C-suite shakeups to a major strategic shift away from podcasts, an area it had aggressively pursued.
At the company’s 2022 Investor Day, Spotify set seemingly lofty objectives that included long-term gross margin targets between 30% and 35%. At the time, the company had been struggling to turn a profit, with its gross margin stuck at around 25%.
In the most recent quarter, Spotify said its gross margin increased to 31.1% from the prior year’s 26.4%.
“We’ve never been in a stronger position, thanks to what’s really been an outstanding execution by the Spotify team,” CEO Daniel Ek said during the company’s fiscal third quarter earnings call in November. He added, “We are where we set out to be, if not a little bit further, and on a steady path toward achieving our long-term goals.”
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