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Music streaming service
Spotify
said it expects revenue to increase tenfold in the coming decade.
Daniel Ek, chief executive of Spotify (ticker: SPOT), told investors Wednesday at the company’s Investor Day, that he sees Spotify’s top line growing to $100 billion annually over the next 10 years, compared to revenue in 2021 of $11.4 billion. Margins also will improve to 40%, he said.
Streaming services such as Spotify and
Netflix
(NFLX) have been hammered this year as households grapple with the fastest inflation in four decades and rising interest rates. With shoppers spending more on energy, they will have less money for discretionary goods like music or home movies.
Spotify has nevertheless ramped up investment, betting big on podcasts and audiobooks to move beyond streaming music. That has hurt profitability in the short term, but the investments are already performing “better than you probably expect,” Ek said. Gross margins are at 28.5%, with 30% to 35% as a long-term goal.
Spotify also will offer new types of content over the next 10 years to increase users. The company is on track to hit 1 billion users by 2030. It reported that it currently has 422 million monthly users.
The stock was gaining 0.4% to $116.50 in premarket trading Thursday after rising 6% on Wednesday. The shares have lost about half of their market value this year.
Write to brian.swint@dowjones.com
Read More: Spotify Sees Revenue Reaching $100 Billion in 10 Years