Hi Everyone. This is Take Off. We're like a hidden Easter egg in your favorite video game - surprising, delightful, and adding an extra layer of fun to your tech news consumption.

Here's what we're serving up today:

• SPOT The Error 🎧🎶

• The Special Rebalance ⚖️

• Asteroids ☄️

SPOT The Error 🎧🎶

Earnings Szn is in full flow and today, we’re jamming to Spotify’s Q2 report. Let's drop the needle and see how the record spins.

• Total Revenue: €3 Billion (+14%)

• Premium Revenue: €2.7 Billion (+14%)

• Ad Revenue: €329 Million (+17%)

• Monthly Active Users: 530 Million (+22%)

Despite welcoming more listeners to their platform, Spotify's stock did a stage dive when Q3 revenue guidance came out lower than expected.

While Spotify is filling more ears with tunes, they're not filling investors' pockets with returns, and that's a sour note in any SaaS company's symphony. But why so?

Time for a crash course in Spotify's bank account 101.

1/ Premium Subscriptions

This is Spotify's bread and butter. Seriously, this income stream provides over 97% of their revenue.

Even though the company has added more than 400 million users to their platform in the past 5 years, their gross margins still remain flat at 25%.

They recently upped their subscription pricing from $9.99/month to $11.99/month, but we aren’t sure if that’s going to make a huge change.

2/ Advertising

Even though this represents a minute portion of their revenue, they’ve been doubling down on this lately. They're investing big bucks in original content and podcasts, hoping to make it rain.

While the trend has a nice upward curve, it's still not writing any significant checks.

Recapping everything, (NYSE:SPOT) is trying as hard as possible to rake in big profits, but will it be able to do so? What do you think?

The Special Rebalance ⚖️

The NASDAQ 100 just had its long-awaited "special rebalance." Incase you forgot or missed what the rebalance was, here's a quick recap:

The NASDAQ 100 is a tech heavy index which consists of all the “Who’s Who” of Big Tech.

However, some of the high rollers were hogging over half the weight of the index that they had to go through a slimming session. Here’s what the index looked like before the rebalance:

This is how the chips fell:

• Microsoft: 12.74% → 9.8%

• Apple: 12.06% → 11.5%

• Google: 7.61% → 5.7%

• NVIDIA: 7.28% → 4.3%

• Amazon: 6.91% → 5.3%

• Tesla: 4.44% → 3.4%

The Magnificent Seven had been hogging a whopping 51% of the index's weight.

But the rebalance dialed them back to a more modest 40%, like a parent gently telling their kid, "You've had enough candy, sweetie”.

The Financial Times estimated that, based on current market prices, ETFs tracking the index were forced to sell $30 billion worth of stock in the six companies and plow the proceeds into the remaining 94 companies that saw their weighting increase that saw other indices rise temporarily.

☄️ Asteroids ☄️

Netflix touts $900k AI jobs amid Hollywood strikes. Maybe should’ve waited a bit more for that job posting? 🎥

U.S. chipmaker AMD to invest $400 million in India by 2028. This will include the creation of a mammoth 500,000 sq. ft. campus in the country. 🇮🇳

T-Mobile posts highest Q2 subscriber adds in eight years, beating estimates. It added 760,000 post-paid subscribers and has been taking the lion’s share of subscribers over the last 3 quarters. 🛜

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