SPOTSpotify Technology S.A.
Is the business good?
The checks split: nothing decisive, though earnings fully cash-backed (1.3×).
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
A balanced mix of margins, efficiency, and leverage. ROE 27% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is SPOT?
Spotify Technology S.A. earns 38% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 29 points above what the capital costs: growth creates value
- Operating margin
- 13%
Operating margin · Internet Content & Information median 4.9% · fiscal year to FY2025
- Cash conversion
- 1.34×
Cash conversion · 1.99× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +1.7%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2020 | −3.7% |
| FY2021 | 0.97% |
| FY2022 | −5.6% |
| FY2023 | −3.4% |
| FY2024 | 8.7% |
| FY2025 | 13% |
Details›
- Gross marginfiscal year to FY2025
- 32%
- Operating marginfiscal year to FY2025
- 13%
- Net marginfiscal year to FY2025
- 13%
- Free cash flow margin
- 17%
- R&D as % of revenue
- 8.1%
- Revenue, trailing twelve months
- $17.2B
- Free cash flow, trailing twelve months
- $2.87B
- Net income, trailing twelve months
- $2.21B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 38%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Internet Content & Information
Ranks #12 of 31 by RyuScore