Spotify's Scale Is Leading the Firm to Profitability Even as Revenue Growth Stays High

Spotify is the world’s leading music streaming service provider. We expect fast-growing digital streaming to become the primary distribution platform of choice in the ever-changing music industry. We believe Spotify can benefit from various network effects that will help it increase users and amass valuable intangible assets associated with user data and listening preferences. However, it faces intense competition from huge tech platforms with greater resources, and it has a largely variable cost structure that may limit future operating leverage and profitability.