Spotify Technology (SPOT) 27 Jul 222022 Q2 Earnings call transcript

Good morning. My name is Julianne and I will be your conference operator today. At this time, I would like to welcome everyone to Spotify’s Second Quarter 2022 Earnings Call and Webcast. [Operator Instructions] I would now like to turn the call over to Bryan Goldberg, Head of Investor Relations. Mr. begin. may you Goldberg,

welcome second and conference XXXX call. to operator quarter Spotify’s earnings Thanks,

will our Daniel Vogel, us be Joining today Ek, our CEO; CFO. Paul and

Paul. on relevant. [Operator have using be to most reason, into participants And We afterwards, in to will questions submitted happy questions. Relations questions you by the they start with directly have slido.com, comments Slido them, Slido, some the #SpotifyEarningsQXXX. Instructions] be the Daniel will extent can slido.com e-mail Analysts add Investor to and ask your If at got opening be question. access Questions find can all we can you don’t code then to happy for and will going we answer the ir@spotify.com vote follow-ups, your and you will from time and And to address permitting. can we

cover let the me Harbor. we Before quickly begin, Safe

or statements, deck factors we call, in are will this and projections of filings assumptions These current company. Exchange of based today’s could During the that Securities in certain on statements call, to results the differ expectations materially be forward-looking future uncertainties. subject on shareholder risks the and and because performance including estimates discussed are our making Actual with about and Commission.

in X-K. will our deck, to today Reconciliations During shareholder furnished financial this be it call, that, Relations And we Financials financial in website to IFRS with I our and Investor on our between non-IFRS also certain will measures. Daniel. also over refer section can and found non-IFRS Form turn of measures the

to few you. will first I as mentioned and Day, hope Paul this new you that, I for had a for another success Hey, a to very our we improve our to how would minutes. as growth, quarter. feedback and we to the a communicate now very further speak And in results. step had a million have you Alright. momentum format growth users you We an Investor jump had our about beat approach earnings look important on into want any And And continued. chance the at we building let’s acceleration we love in on and with see Because with joining us. in in user consecutive on take seen quarters. strong thank The QX quarter this I strong our ahead forecast. coming sharing four have. revised MAU X of We everyone

this QX off. teams spots of reminder, one our I the us hard see from has weak was the for so work in am paid a glad As of really XXXX, to

by In addition, global million, while revenue exceeded X subscriber our line. growth in was expectations

not on are to downturn. the Going currently forward, continues we our uncertainty, growth macro while users any for present material impact the or economic subs expectations environment seeing from

In believe could seeing do hiring several am I instituted revenue given survive, are proactively said, of in if seeing. I but as only preparing markets of our forecasts. we potential are by fact, a that reduced we a double-down slowdown, anticipation ahead already our and shared we XX% trending get weekly currently before, and this said things optimistic what the to have hard I monitoring. but anything it’s paranoid be worse, we That

will differentiates other growing more, encourage and for Hopefully, creates X And machine investor Not our and familiar of continuing in powered to how focused replay margins then bets advertisers. those big our over hand generate experience, bundles it. And billion Spotify the and our is I users you we building rinse the will to I’d up to artists, the Audio and and detail the and my with. go really business Spotify invest and detailed making, we Spotify shareholder, get are Bryan XXXX, that, last horizon for is are subscriptions, the deeper unique improving it And and Looking event. as marketplace. and It one user machine songwriters, three into with the to Spotify after is Q&A. confident month, listeners, approach but at further also that We to gross learn And last are success. the Investor this is creators month’s believe all business capture models: this us is in behind to on recent who will models business unwavering. what leverages in. incredible multiple same we I one to not, that revenue-generating a investment it are experience this benefit numbers ahead, our time, And refresher, verticals a will it consumer only site tremendous with also we for measuring you recession go needing repeat really or by upside from free it with multiple Paul into to platforms. to our to and a we the what are positive want highlight are flow. those machine its the open Day, we opportunity on continue confidence term tech by ambitions while ads to cash we

for everyone thanks joining and us. Daniel Thanks, Great.

As shareholder away Daniel moved transitioning from slide-based our letter, to a we have presentation. mentioned,

to on we with what me a are our or new the macro possible feedback. the is and Please performances to and respect with upon to bit like IR out to hope performance the seeing I’d reach we touch as environment now and a format our outlook. team our to turning quarter, any goal easy more understand color resonates this make community. with investment add the And operating Our strong to

additions strong outage, QX. of which net and discussed in to QX after performance. grew X result in was Total million the user history and for the Let’s from prior. March our first our exit with we was active million monthly Russia start largest adjusting our XXX This users ahead guidance our

Moving across where Europe well strength guidance, advertising, and helped Plan decision to regions, part a to to modestly from in million and guidance, subscribers, and upside we we currency activity saw adjusting Latin in finished traction margin in an on was Family our quarter strong impact when we ahead gross stop finished America, ahead with royalty quarter gross was finished of as thanks of the extra by helped adjustments. to but like manufacturing net ahead positive guidance, products Car another X Revenue Duo. margin, our was With accrual multi-user particularly saw premium, promotional respect broad-based basis, the XXX million year-on-year. of by week our in and which of charge grew to which period below related reported QX expectations one-time for as prior XX% movements Thing

the based So, looking on factors. a was manufacturing specifically made at stop few Thing, to device our decision Car

tested we current haven’t of and financially number First, prices at viable. a we would volume make seen points frankly the the higher product price that the

inflation costs, into significantly coupled needed development. expanded and component reward lean rising continuing time product further with has lead to the Second, of to risk altered order the parts,

a XXX basis $XX in resulted by million, in gross margin decision quarter. points this of one-time impacting charge Our

gross further minimize decision cash forward. expenditures Our impact margin flow moving will and

mainly decisions of Day, increase in global result end operating our drive to we during of expense through XXXX, expand platform saw invest recent sales QX to user the was we growth our growth. marketing made in team, much Investor our discussed our we of As a and

foreign portion a the seasonality, associated We did operating significant flow. foreign of basis basis, have exchange we ninth with and And Podsights, forecast also on of U.S. straight trailing added growth, added quarter our and positive we shows was out free points growth cost lastly, at free consistent while generated this and we movements expenses cash higher increase than of And expenses acquisitions a more expected. in trend. operating a nearly growth Chartable XX-month of cash looking which in incremental our are very it are smooths Whooshkaa. denominated exchange And flow expense, dollar X,XXX our in our despite

past out see years. $XXX cash believe looking our lumpiness have averaged is also we free for the of key We this quarter-to-quarter. really the at X and business of over smooths way that We flow million

QX global seen no macro outlook. impact said, user have but on or at our Daniel beyond, looking to-date, as real subscriber monitor outlook, So, the to we continue and

expect Specifically, we expect net to additions year. MAU and to accelerating subscriber similar QX see of last adds another net quarter of

did revenue, trends see growth the year. have with On some premium weeks up our we slower expect in the side, in And of which still still we majority we the might but earlier of be softening expect to last than in advertising, the as for albeit June, that context, solid mid X QX, the over single-digits. forecast we is ARPU in

continued uncertain for to year. new offset for we despite well. music for macroeconomic commentary in continue XX.X% up And will will we in have headcount reflects be Bryan full with of slowdown with as announced initiatives. later XX% our be across an on trends over negative operating that, core year-to-date. and with outlook our things operating environment, improvements next continue growth a benefits the by expectation select previously Our our the hand closing, elevated additions, I of encouraged the gross showing to In margin with Currency QX’s business, podcasting back by highly few our the run-rate consistent is expense anticipate growth for in We to drag seen OpEx line quarters, year QX and Q&A.

to Instructions] promotion Alright. XQ what gross on churn of subscribers. extra today on intake Can Thornton first on some quarter terms are Thanks, week you going Paul. in come of question provide the seeing our is second color Premium Matt impact what the and you And outlook? [Operator from had and and

Yes.

still intake numbers. basis. we give I was we churn with in can at out on down year-over-year general, specific in line churn. really and trends, But of the expectations in or haven’t churn positive change So, trajectory all you, gross tell – a any so We know seen don’t

bit no so we the on not quarter. all a extra the say but would week, from see QX. And the of extra either helped definitely some those. into it, little that in but came week, the carrying I impact And of it through outperformance of

is the And is heading QX number, into so sorry, expected into it into QX as heading as QX QX. the into is it we thought in QX same the growth heading heading – that

and QX growth in was So, as also strong QX we the see in well. outperformance strong

Alright.

We experiences buy our initiatives. fans via from one What’s reaction and of Spotify? early have early in want another willingness How queue the the creators? And artists and content or to are artists the sell and driving been uptake Matt awareness? Live Thornton. from been is This what’s got to question here Live on we

on Yes. days of our of say physical early I initiatives, Live ones. experimentation would it’s kind sort digital just the on both and really

the pandemic. to do we it’s events, during did bit been but side. digital a have Obviously, been bunch We physical live the experimenting of quite a that with hard on them

of I were very can for those experiences is to think reality inconclusive, world, we that much in different the and now, if it people are just in is experience of the during learnings that are world the a you sort much the of post-pandemic that, from because pay call willing pandemic.

we are looking the of kind prevalent learning early What is me and format of So gives days iterating. many however. this really at Asian in markets how in is optimism

of NFTs, to So their you with consumers in participate to see wanting bunch stream great you creators. formats, everything there, you live see shopping from where the favorite a live see

looking space. from That’s to this a that’s rapid the near the a on not markets be for where us. in of inspiration, you a at is going effort but should is multiyear that innovation lot expect there in So are it’s improvement but in we something quarters, Asian

Okay.

At we audio Investor half Next you other ‘XX? question expect And new category Rich your about verticals. when we How categories on closed at your think the new about impact you talked should acquisition. of back categories, more Day? is in from should teased to on hear the Day, having the the new Greenfield about this of books Investor

Yes.

Findaway. we are in very closing So, pleased

do to work that integration team. So, work starting the and happy with now to

us You market. quite to should get something see imminently

months, categories coming proposition. do book But that of moment. market you with seeing coming of internally audio this plenty them. half extent more what full that really the kind of other rapidly So we iterate those and a at investments of something that upon but announce and half work But of very of We ‘XX And will first in you half to in well, year is will the as of second the coming kind some we see some Spotify. reality it’s and this improve are our can at is categories big the the of are nothing are think doing those probably first for weeks, start ‘XX ‘XX, sort be ‘XX experimenting early doing the experiments – of in I of or to efforts. point we will what and bets there of about be then

Okay. from And on the Maria our Ripps next ads will be question business.

Your in that mid up driver? increase share music additional growth where CPMs single-digit would advertising be load can double-digit your ad an on impressions. to in you opening your be? versus and growth where impressions thoughts ad and saw business you a Can What’s is like it today – more

Yes.

So is the step think a that will business. of at number advertising a back in grow ads take I’d I there if say think look you and factors we general,

growth; is just side. actually user two overall I think are focused the engagement users we for a on is One for things. on and growing for of us, couple

of increase one increased ways the to is best engagement. actually get So, to inventory

some constantly will to have the improving of to products side actually at MAU drive best up the the within times you more to actually the we over don’t DAU come different ad amounts. it of people see think impressions, loads. ads usage that’s to is We stand. the to because product often way on people continue different serve there and from the really more is and actually room and will back are and more see more about time. ratio how to and and probably person that free in the improve we different and engagement, we free increase both lot innovation to think testing dynamically A offering it So expand sort depend to on We and engagement talk

see And so how sell continue to individuals. of innovate ads us we on and will to you kind when

Alright.

and advertising puts and an of Justin not is business. advertising wake question takes uncertain the on advertisers? toward in channel how margin the gross gives think in for the margin advertising, as And Patterson ruling confidence should gross we podcasting you and viewed experimental market, Next then to related from our ahead? Paul, CRB about what that an

Yes.

been So, at with respect were so CRB high ruling, we level, reaffirmed. at rates that a accruing the to the have

forecasting nuances no on major perspective a really from to to was There the is there both prospectively language. so based And some modest a or of and some modeling change benefits anything from the within us perspective. retroactively

that will you margin pretty little be in a that’s So, saw minor. what for benefit to accounted bit in of small a there QX. accruals moving the minor And positive we it’s gross forward, but

minimal know comments or for ruling with the I on pretty on And any I advertising our experimental, forecasts. don’t So Daniel most to the being podcast not if numbers I our have will has and mean, part, then start, this. impact respect

advertisers, growth. the have podcasting seeing continued We growth – seen on year-over-year are strong significant number side, Again, increased of strong demand. we increased

are trajectory again really and the We think we but QX. tough growth strong always saw So know, we people. with in becoming have encouraged seen we core year-over-year growth. really it’s It’s a for to buy just the

addition of it and you around as and podcasting, about Yes. just about broader very if that’s from out audio the unique My a more media is, the things audio category, there. is other how audio around the think think properties really all not is it but differentiated one about only

is the around in think huge in going audio a outside, Similarly, headphones beneficiary in of obvious media reach going our reaching particularly consideration, in is you as when with for – advertising, and be into Radio that take is up. to believe are less America. is other a case, consumers and car. content down. that primary going more of quite can in, ads us to they driver format I is use more people audio car. massive that. Digital is too. car a and of dominant about there is usage are there the people earbuds walking no It’s that very consumption local So, opportunity the The North that

data about and have a at that is itself sort don’t that. that, them audio think other that to a people they addition with, you see people addition advertisers And no we’re where times engage from in kind in I certain have, host-read to the lots reaches a you – mediums it’s and people it think qualitative advertising response seeing it’s it that about topics structural obvious audio reach for mediums principal have. properties of ads, I as factors you it to that other when you’re to when you and then seeing in great be first-party category more of going and standpoint, standpoint, adjacent see massive the of on – So from think because

we’ve we talked take about think that’s working are despite we a also and environment, macro seeing really, up up, them. And to – is of retention so format higher that that is product well. testament And that the to the going a very the the really actually for I working. clearly advertisers format the And advertisers this shows have But that before. is

Okay.

question here? Next given investing investors about Rich you on share generating because on are you With win billion $X you’re stock of continuing dislike nearly the to you audio where cash stock sitting repurchases Greenfield, balance your do your think sheet. how long-term, and are to from trading is cash

I surprisingly, time. the capital about mean, Yes. not talk cash we all and allocation

hand, some we’ve need more we’ve interest coming had rising or cash lot, and obviously, pipeline investments, for some Given the not we’re anything well. with given to we’ve go and little rates of on the acquisition, a our the have hand. an cash always wanted to ever uncertainty, the on from back either a with had, making which hand we we new to as and continued it’s acquisitions market which, M&A, was to the do, we’ve done one internal of on obviously, also have uncertainty, the And made comfortable to the safer been and

So We this stock the obviously we is believe fully front of think about us. time. opportunity in how in big and fully where aware opportunity our price all it are of is the of

so think it’s just to to authorization we business. We do all capital have way in And the the weigh the we’re run the we something place. best always time. And is an allocation looking

our ways three there My think only would invest be, in about that business. obviously addition utilize you our if to One is can we is it, cash.

do to do is the now to share or one dividends, and order. we the third is that opportunities moments. dividends. this those of we see And more in then, invest buybacks than continue is second share in business Every buybacks do in and The to to

for so going business. we’re making, And with the good investing expansion those investments And really all into, feel that of formats with the reasons, of it, we we’re we’ve the the in been podcast etcetera. about

is rather else. to the the anything we So than or in investing feel keep doing buybacks thing prudent share more business

Okay.

from Next recent half anything for question Thornton, else? drivers through or ‘XX, advertising, key the international, acquisitions, on Matt measurement example, second World Cup of political, what ad in are growth

you, Investor Why a can chime – start talked our is So and about that thing, and Paul, Day, before, said too. this don’t in? during I little and then this bit the we I think primary we

of part one is to just that So a inventory the advertisers just yet. our available number still isn’t lot

contributor that, strong like you obviously the going by the the that’s of are typically add events, ad far ad growth the think to businesses, business. one-time if advertisers sort addition impactful anything? for that increasing increasing and events So biggest That’s mentioned it’s I we’re they be to inventory some results. wanted better of going single available drive Those of very to you ones. really essence, in elections And the for can expanding be sporting even amount in too. don’t Paul, to are available. about for But top targeting are the that Spotify, then know, the I so etcetera, those and to inventory

the the to The more tail just end just XXXX, these some we’re on political of investments year, really fruit from for that of Yes. We’ve will of is us. of a touch in back maybe bear sort making, I standpoint. think definitely specific this lot entered but No, questions, there. international new in

We’re doing targeted smaller way. it a in kind of

been will impactful the and we for us. And to attribution been how know. at the help, a measurement of is. we honestly and a are things I looking will into as growth Actually, on point, measurement side, So continue and And said, improving, definitely this for. and see Daniel lean all that that’s driver actually tracking think advertisers that don’t we that’s

We’ve on second negative for operating quarter Mario a guidance quarter. from to Historically, Lu seen the the question sequentially we’ve Okay. dollars improve growth. operating income the got quarter And calls sequential third third from expenses.

FX, of investments, call or cause are would outside to there content OpEx decline? – So that incremental to out this

it’s not hard $XX to FX. or about Yes. QX expense to I higher QX. FX. going million It’s pretty mean, for growth on a impact have headwind include FX starters, an on based significant is in just

in, we And so we much dollar, just pretty relative but the appreciated people this, euro. in has of to most know refresh, operate U.S. every euro, the that currency and sort report to particularly and

see the side definitely from the side But from an we OpEx revenue on on we drag even currency. So bigger currency. benefit some see

you matched OpEx cost the perspective. are not up side. have a but fairly they and revenue up gross perfectly, at and and – matched We from up. fairly Not got revenue revenue they are matched if look margin, on but

so do And our amount dollar operating U.S. expense revenue. denominated of have we disproportionate in to a relative

as well more our changed. – is expected much of global users, marketing over X in that we force some – than and us FX on particularly and months I already grow ago planned had in based newer Outside us markets. the continue to that, our grow that And that mentioned. and kind to increase so sales to same of as moved. probably hasn’t We And it’s QX have things will how hurt of hurting currency

the be three So those that QX. would are in factors impacting OpEx

Okay.

from bright the innings. still the be conversion more What into conversion a is MAU to do early subscriber do convert world but Justin those in the continues from MAU Daniel, spot, you question rest in and on of need opportunities, Patterson, a sub Next perspective pricing plan to to growth subs?

Yes.

just the that of the call there So want effect one I give Spotify. bandwagon likes happens important, is very is what I it’s we to first I context, And at because where analogists these is focus two actually of one-to-one of have a growth is of linear, on what both trends been a subscriber But typically and between we user everyone part believe generally each. have think what think happens then of to sort piece flip-flop growth. gone

points focus So more conversion, history, some the of user of is growth, indicated better leads that part line since in we to some now, history, Spotify – numbers time. bigger But we launch point these in because more MAU, a growth once and always, on became on the priority. focused the we’ve subscriber we seen XXXX always trend in spurts really over our it through go as that

we we just when to convert about So here. time. from, focused lags figure then of those depending until how sort have usually best sort customers where just on them? a bandwagon year out, And of come material it’s team we start that. really seeing from okay, And get do gets on And a we it improvement takes effect. them It well, the

about recipe a more year might challenge with So focused for it’s proud has plans effort, very in the markets, But their I what platforms very very very to at the do, of reaccelerate of the work. these very, be MAUs, team much I’m MAUs. don’t specific – and that. I very general is, past users. reacceleration seeing I’m At a difficult even see will do the if that of results growing not we’re scale, as look think the been be, the our marketing it to pricing I that of can this it’s in some very, many know as you pleased And and very, etcetera. of

We over impact right now. that you that too. our are of very the that, are we guidance, can in see And very, for the will year, have remainder as doing the positive

year now you number take is, the What takeaway should to, one entire that’s will going keeps So now the future, from these trend will the growth going as in I the believe happen? how is indicator from you’ll an what’s start past. subscriber that. happened evident this more happen to what’s That’s in how probably too. call. probably now, now, of paying that’s that happen as well, back line team going seeing happen from will earnings I will convert acceleration Exactly that is, history And what comes okay, in be this too. The the methods. never I’ve now, what If of various different do out don’t figured when stuff that. very that’s resourceful any roughly just And team is and/or we people We working team is have the customers? to know. plans on like pricing a payment subsequently into it known history.

Okay.

Deepak on Our next come marketing. question is from to going

about for second half of off from on your OpEx the subscribers the MAUs partnership us partnership With the help kicking July, half? in from And can year? you talk the and the size you expectations it can the in second incremental impact Barcelona also for

Alright.

about the OpEx. first and I’ll So do part Paul do part can the the second

reminder, in about general with in club the number also, Barcelona the around have, so has around impact excited younger growth of really particular, just why is one the Asia, audiences, the Zs the partnerships we markets LatAm, a our world, the one club but that Southeast reasons we’re that as has. but So in the in particular, Gen

lies well. are what of think opportunities where So growth future we as perfect it’s when and really strengths about kind our overlap their a

is that’s probably gives difficult customer markets, many organically to framing good base to notoriously to investors be this reach will very, at exposure a market which a of in. to for us this look So as, very towards hard in amount them a tremendous

will customers that’s the believe partnership other source be that which partnership But than in. in. any initiatives the That’s should more obviously entered we have to relative other to that that out. be could these we something through So reach accretive proven marketing this thesis we

go working social channels and the the just in FC and is Spotify both to you of it I where And see that already. the music team content YouTube social would subscribe are soccer/football out that’s and off can putting and so to channels chart. Barcelona to that. on now, just And and channels coming all these engagements team, highly jointly amount see And with the TikTok are social the many life. all, the and you they is to Instagram recommend

expectation is This the of So, so second year. have into come far, a so in partnership. good, that the this is multiyear not half but will should fruition you this

on the should specifics and feel But that we if way And what take didn’t on second why and and in error. what as see OpEx. stopped out partnership That’s is the probably our I through most what – ramped that’s get you down that hopefully the should worked, this you will right, channel innings. if I thesis works. Gen And can We LatAm being around this Paul, team results. and us. a it we talk work Southeast most to Barcelona Asia. don’t And important great half that the see in. reach about delivering partnership know That’s entered in efficient doing partnership about early want partnership. yes, the to you very, the which the Z great of the iterate it’s from to good the we year side ‘XX proves be we focused by learn have a side, are very from it’s have trial on and team thing The Doubling

Yes. things. couple I a had of

I Follow echo media. social what Daniel said. on just will in First, general,

of actually in Bull bunch know, in of in don’t is Barcelona in will Vegas. guys They at Miami. you the great. It’s playing athletes has friendlies media the fun this have seen U.S. If musicians combination on They a athletes, we been love have be mutual York love The have upcoming and Red been Stadium watch. love been out been to social They musicians New pretty Saturday. and

the So, just in to that’s And terms Daniel’s echo actually point great. been with reach. of

as to And of next of people places would and year. phase our data where reaches suggest as and Daniel real over America club XXX Barcelona emerging million is growth Our per them be. markets, in many a going unique mentioned, that Latin

from absorbed, of then we incremental about would And costs. an OpEx super have standpoint, are So, the I that. we say, XX% excited probably about

But of have is We to be going there about will be other previously. XX% cost funds our reallocated incremental.

to back be then a of fully we be marketing some bit the as of the year half reallocating through. the will into sort to able of will we cover said, Barcelona. spend we And Daniel is sort related that. to dollars that XXXX, of of costs the incrementality as again, as the cycle in get little some marketing And So, of

Alright.

premium premium of margin, vast Next any excuse profit question majority me, from of subscribers towards subscribers. from represent margin world. gross comes region – mix regions Cahall premium are your growth skewing Does present Steven and LatAm And by on gross headwinds? the in slowly or rest more gross the these

that The any don’t have really premium short from impact a We answer from at is no. all perspective.

U.S.? And considering Okay. any in quarter. in And premium premium benefited a where actually, there’s price increases? in did follow-up reportedly price Cahall you you the pricing, from on perform the – the how regions Are Steven implemented conveniently, in ARPU On churn queue. from increases

will has start, and I comments. any Daniel if

no in in as over general, we couple question, have old. which seen are churn getting we first, questions in have I with increases. relative to seen price addressed of about that quarters, now general, just couple just a impact the either at that churn, we any haven’t in the to of respect think Most any about material And macro on we we all churn. of churn, we increases but saw macro are talked uncertainty. no of impact And just earlier, a our the So, some the quarters last change we launched of in price

with So, been I core anything. the on of our QX year-on-year said, down price – And versus line obviously churn in QX as last increases, churn been in we commenting was then right expectations. have aren’t And levels year. on

power a said, We Investor that of at we over have have is uncertainty. being about the time. Day belief our That lot talked pricing there macro

we when implement to we smart anything. how And going are always so be and about

know, if you don’t that. to have Daniel, I anything add So, to

before value into we the the I marketplace, and over to any of we to making given No. moves. obviously careful that translate providing very we be that going say, able macro ability, we feel are price uncertainty consumers value But to just in are increases. really would the in our that be should confident time, such

uncertainty marketplace, very definitely we are long-term, in any So, pricing we the to decisions believe we short-term, make. into uncertainty the and about concerned power, going evaluate obviously have we that

Alright.

Ben And question Audience who through build the is you publishers come can addition, the other Our to attract from opportunity going next Audience Network? options How about meaningful innovating in have more you to talk to in Swinburne on are off Spotify revenue monetize? to advertising. the Network third-party Spotify Spotify

of I mean a I look, it’s Yes. couple things. think

at geared measurement, Spotify advertisers, is, on will SPAN people into bringing so SPAN. we one think have their value which been put have I more people more higher, the into those they the you to bring that more personalization made, inventory attribution, acquisitions for that is more get if look and towards more want

of kind acquisitions some about, the out a through then which well and tech, those way is both to it’s really the stack, So, internal wider build as have the to development continuing of of in offering we I the guess obvious, as those own up made, ad advertisers. ad integrating our

are which advertisers. to more self-serve tools, bring our small out increase to in midsized We and build and going continue will

go will advertisers, in all so and and And can to opt-in publishers towards that bringing effectively more on more advertise who both the both Spotify. easily of

things. would about a you I Yes. it, trifecta just add, three it’s probably think if of

contribute, publishers. platform us of So, it’s can it’s advertisers what number number as a the and the – the of trifecta,

publishers to ad sales there powerful but that truly many And mean a the formats. the there is in obviously it a and So, Spotify advertisers network And all if on talked is in things that to team the relationships markets thing. markets deal. in about something are data, we it’s lot what can better of now, That should many abilities, should cover as add can is targeting Like to addition have get a getting underestimate, also better But side, does. deal. the we this audio better scale around we table which to also better enough very always a a that, better advertisers, publishers world. sizable means tend get the Paul as pretty that’s help advertisers that no platform

I are audience have say, mean more Spotify, because, So, alternative you That and many have you frankly we better a table. if just advertisers. when should data results don’t let’s speaking, the publisher markets, to for more to see – any in bring to

than could So, we in many they their or also reseller on are can more markets, through their own inventory. much do a inventory value. their in say smaller getting advertisers And have we help better force sales many our sell markets even of because

we as because platform, and of bring off though for still off bring And we know delivery, to they what are So, X, platform, novel around host-read unique ads, and the points around leverage know our bar well, advantages too. sort lot and even people bear similar we Spotify force with all sort talking win of in audience bear. are the our sales can which what perhaps we kind of should a on that of their scale, on and more to advertisers the are those SPAN that

Alright.

from growth and we the and about forward? quarter of to come Our of the developed MAU second America Latin lower on the How there Lu from from in North next Mario going question markets saturation market World America came versus is growth should western think growth penetration. in Rest going user Europe. Much and

revenue maybe, obviously of think than the Obviously, I the markets. inverse the naturally TAM, the set Paul, existing greater you world is start add. and is probably potential then rest in future about The to far market when in can short-term emerging potential. you will or so,

think I opportunities. markets. and means believe we developing already is, these way think come rest think markets of then up-sell from in more come about or our story and and should we it world, can audio great mid-term, the our too. more more growth the talked markets are you during Investor should where they side, what think And of in growth user sort should I mental will near the revenue But model, a books, given – the long-term, of users mid developed to And of sorry, growth see near, to of spend means most mid-term think they more would developed spend most on then time of about emerging the if from of growth developing the than revenue, people create which there, is will the that in near So, and also subsequently, in you about revenue then more podcasting, more our the which opportunities time, platform of more and sort then emerging markets story overall, more about we of user you Day, from to and we and in into that there increase obviously, long-term the our think, come growth monetization mid terms not. we

side. is developed So, slowing true that not the revenue side on flip it markets is Their down. were

the story. monetization of there have little long-term We side, have the And do then emerging to work that’s on bit longer, but side, markets mid opportunities take more on still. the and to lots probably a we that will

Okay.

Swinburne Ben books audio question from Next on investment.

on next should we have can And So, audio now a for sense or to OpEx needs months? books over months XX vertical Findaway, materially us investment you you closed thinking the in margin this XX about give the be that gross impacting XXXX? of

and can Paul start, add. I maybe will then

impact that And that us super great will should just OpEx. plans. we live. obviously are So, and you start to getting we results, the should this have down as turn, on any are in we before, efforts are double integration seeing investment. in we experimenting, imagine we Findaway, about still trying you imagine, early might, and and to up with obviously, create like talked But If

this gross to However, for be different substantially vertical the that other will us. should be and positive margin considerations than verticals,

with add I expectation our having would thing occur will books only iteration of mentioned the the Findaway, that that And audio Yes. I think closed, QX. is, is in Daniel first

assume integrate talked And that gone been to OpEx that has the have up of about we resources, building have some that can so there that we potential you Findaway. quickly to the been making sure has

out build for guidance. sort again, that XXXX of we have we as the and you been And already ramps, to And some that guidance be as team to there will incurred then Findaway. when we give expense give it closer so we get prepared more has

Alright.

going additions question, factors be got time have XXXX Doug here? subscriber come MAU and what in view to still And would from additions. on to that’s with net net and XXXX Anmuth We one for levels? Do your line you change more expect

Yes.

with let’s So, MAU start first.

as we our imply have really some had when for MAU guidance, as for for some or have side. on well – kind of you kind better for numbers on And is we on you guidance to are than – the similar pacing moving that year. the the pace to to on do out expected MAU XXXX you the aren’t sub-side, pulling seen as the – QX, those think in done numbers, through there of respect with definitely There are as Russia we XXXX as think can we of for I well well now would that growth well. we And are through subs parts about QX QX then and both the Russia pretty giving while well.

say, would kind types yes, the roughly when you normalize kind of, would I for say, sub-side, Russia growth of similar of I stuff. the on So,

than what On to better I bit we the side, do definitely like we of look said are MAU little kind on already. pace a

Alright. Great.

I to going for over session will turn that’s it conclude on remarks. Daniel our some And closing today’s to back call. Q&A So,

And out Alright. or all tomorrow that just our business. am And record year. to lot the and I please should be in the dropping of to detail, just do you, quarter check saying And the by for forward have of confident And podcast rest close the I testament everyone, great call. the more Well, after. that. a look for was thank joining really I optimism day want this hopefully, to that of

you thank joining. for So, everyone

A replay. also and website app Spotify our on replay today’s available concludes call. will Earnings Call Alright. the be Spotify on under the And that

So, thanks for joining. everyone

concludes This today’s call.

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