Ahead of its IPO, Spotify Assures Wall Street of Profitable year ahead

The streaming service has said that it predicts this year will be a really good year for them with the prospect that sub numbers and margins going will go up and operating losses will shrink.

As Spotify prepares to go public next week, it shares its goals and predictions for 2018 with Wall Street.Image result for spotify ceo

The company is taking unorthodox approach ahead of its IPO as it is mostly, but not completely, doing it without the support of traditional investment banks. This means a lot is weighing on the reassurance and predictions given by Spotify to present, in the best light possible, the opportunity to nervous institutions.

So what exactly does the streaming service predict for 2018?

Spotify is confident it will round off 2018 with as many as 96 million paid subscribers, up 36% from last year which ended with a total of 71 million paid subscribers.

The streaming service also believes revenue will reach $6.6 billion, ending 2018.

Spotify is hoping to find sources of revenue that will not be dependent on large-scale record labels. It also thinks that it can bump gross margins 4% going from 21% last year to 25% by the end of this year.

In the predictions for its first quarter, which ends in a few days, Spotify thinks gross margins could climb to 24 percent. This would be a steep increase, which leaves investors curious as to the reason behind this predicted jump.

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