What's up, Apes. Welcome back to the five-minute peel. Today we are going to be talking about Spotify.

All right, let's try to keep this one to actually under five minutes. So listen up. Stay tuned for our rating at the very end and what you should be thinking about going forward. But let's go ahead and dive into the company's latest quarterly numbers. As we all know, because we're very wise Apes watching this video here. Spotify reported earnings earlier this week on Tuesday.

The company

absolutely popped off as a result of the numbers dropping and it is bawling off a cliff

here just one day following that reaction. So it's kind of normalized Dell basically didn't

move at all following the earnings report. Let's go ahead and talk about why. First and foremost,

investors can't really be too mad that it's falling today because the stock price has been

killing it over the past year, up over 130% to a valuation of over $60 billion.

At the same time, we saw revenue grow about 20% for the period or about 19.5 more accurately.

We're also seeing margins improve very well at the same time.

So this is very constructive of that development into a more mature company. And don't come at me about this FCF margin or declining revenue as well. This is a very seasonal company. Q4 tends to be the top performer for Spotify, good holiday gift, just to give somebody a subscription of some bullshit I would know, never received a gift. But either way, what we don't like to see is R&D a sales on the. We know Spotify was in cost-cutting mode, but either way, that's not why we want to see the cuts come from. What we're seeing kind of holistically here, at least on the income statement and cash flow side, is that Spotify is turning up the volume on moving into that more mature stage of its lifecycle. So very similarly to Netflix, like we talked about last week, the company is moving from growth into maturity. And so that's something we like to see, but it means there's a lot of questions for investors when a company hits us kind of an inflection point. Now, the good thing is that the balance sheet is remaining healthy, solvency liquidity are all good. MAU growth remains decally strong, but we're starting to see a bit of a decline in premium

sub growth, especially compared to that of advertisers.

And so, or not advertisers, but users who don't pay for Spotify and somehow are able to sit

through those god-awful advertisements on the platform, I don't know how you guys do it, but

either way, what we want to see is premium subs going faster because the unit economics are obviously going to be a hell of a lot better for premium subs. But Spotify is also introducing a third tier later on this year. So the game is going to be changed going forward. And we'll be talking about exactly how you should be thinking about that in just a quick minute. But for now, just know that the weighted ARPU does continue to improve. Not as fast as we might like, but it's still moved in the right direction.

Okay, so earnings report.

First quarter, the company knocked it out of the park.

They beat on both earnings and sales.

They actually did miss on MAUs, but still this 239 million number was slightly above

what was expected for premium subs.

So that's really where the

company got its gains on Tuesday from. Improving fundamentals, slowing growth in users. That's kind of

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