Spotify Technology (SPOT) 25 Jul 232023 Q2 Earnings call transcript

Good morning. My name is Julian, and I will be your conference operator today. At this time, I would like to welcome everyone to Spotify's Q2 2023 Earnings Call and Webcast. [Operator Instructions]

I would now like to turn the call over to Bryan Goldberg, Head of Investor Relations. you. Thank

your begin conference. may You

you, welcome XXXX Spotify's quarter and conference Thank call. to earnings second operator,

Joining will opening Vogel, happy our and us and and to CFO. CEO, today Paul, We'll be answer Daniel your start we'll with afterwards, comments questions. Daniel our from be Ek, Paul

most and they then questions can If can Slido, directly to relevant. Questions S-L-I-D-O.com, and submitted find vote #SpotifyEarningsQXXX. you code all access add-in at going by question. the be can your on email ir@spotify.com, into questions the Analysts the slido.com, participants reason have some to using can Relations for we'll Investor ask and don't you Slido,

cover Before safe harbor. we me begin, quickly the let

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

also section to Relations and During in we'll X-K. can also shareholder today found Reconciliations the non-IFRS financial refer IFRS Investor call, certain measures be measures. non-IFRS our in on Form deck, between of this our our Financial financial and furnished website

that, I'm to over with And going to call turn Daniel. the

come to growth subs. really own over both deck, and in review And a shareholder all us. was addition, that hope from I see quarter. again, the all our had as see, you outperformance gratifying across chance world. joining and for right. thank the our beat markets to everyone, in strong All Hey, you expectations all you continues very a it to We it's and MAU can

before into we So let quarter it context means for growth me the what the go ultimately some more this on business. share

reacceleration to growth this highest QX in And was XX in quarter Spotify's our compared growth that as million paying-off of this improving shows where our MAU XX significant are we quarter and of user platform saw experience point MAU And comparison, and netted growth our investments history. is and of nicely. this podcasts the XXXX, So a adding million.

for about comes of users net that us biggest an who they're driver I've million engage, start from more have is outperformance, enhanced momentum more new And the capitalizing talked million we discover and powerful we ad-supported pay the to experience. on growth originally achieve this MAU and is proving service. the a XX subscribers subscriber on our fact quarter, of the helping anticipated. our our effect, meaningful before six funnel this where willing with to than users X really quarters are a more It

We can So and drive increase we us growth. we now let's new user. about growth. for revenue ways grow There business users, can to revenue new with create our three talk are revenue can revenue streams, per

us optionality preference focus consumers is retains future. Our our of number the overall advantages platform growing them and the on gives as this for among to scale on

time a when increases important in toolbox. also we've tool price the that come a been will clear become However, there more

that And markets, end, North the XX to including than most felt we was Europe And we across increases now decision, aware, more you and announced broad this of but timing America. yesterday, carefully price as of most weighted are we've right.

and QX this as have a won't conducted the to user the excellent we value move. up lot past the per to and with content our QX, offering continue to XX end price experience by And impact expanded expect learned price position And we while We meaningfully beyond. to experience, have offering, this our few until we increases we've Spotify and of over on churn. user lower enhance puts it an have this strong over revenue coupled years, impact already, make in a improving much meaningful significantly and

to make efficiency company. we improving finally, And progress across on continue the

future. reduce As we which business outlined a Paul streamline Despite efficiency, me will this moves confidence. largely have us to making new the QX. to in we of the still in in explain, we these These lot become position have and changes our effort actions managed to to improvements. taken costs, create much an of several And further increase stronger operations and velocity overall gives more experiments a

Spotify, the the of that is is important daily the that at even So Therefore, success. iteration long-term is looking perhaps our I we've learned than ultimate had. progress, more if have of speed occasional brilliance lesson of faint, indicator back the believe we clash leading

And to numbers and for Paul it then for behind more with the I'll our open that, will Q&A. detail turn Bryan it up over

user in Great. strong upon subscriber user to was to on Thanks, outlook. by grew growth everyone, broader million industry joining for us. and quarter the best and on Both new from color then a XX our XXX record. growth Users touch subscribers, the I'd add exceptionally and XXX in of MAU while we accelerated more million. the and subscriber QX, million, growth subscribers our and at the driving added thanks, Daniel, finishing million like XX the QX the our business highest bit Overall, for quarter. and performance quarterly

quarter. grew during the we year-on-year XX% front, revenue EURX.X the billion On to

quarter's neutral XX% prior accelerated versus result. the growth and FX Our was

turn now gross me Let margin. to

As call, our QX efforts. to I expected efficiency incur previewed in related we ongoing QX during the charges to

footprint we quarter, our estate In to business. and real podcasting certain steps shrink rationalize of areas our took the

We also business. Soundtrap exited Marketplace our

our a positive expect on on to of go-forward a rate profitability basis. We all of moves these have impact

quarter, in EURXX expense. were did gross operating through these in and with of flowing million net through EURXX margin our cash the million of million EURXX charges flowing EURXXX However, million About related. result roughly charges they

margin, in With and expectations. was with excludes which charges, these adjusted that gross context, line XX.X%

marketing and guided offset charge of legal lower we by reminder, EURXXX spend, one-time than potential social charges. accruals. million operating which planned, a excluding than more Adjusted better margin helped As was gross higher-than-anticipated loss

EURX QX. flow in cash was million Free positive

third an million X XXX to in are gross operating we forecasting over from also revenue, XXX increase and QX. an of quarter We're of of billion ahead million guidance, XX million. an of increase loss total million MAU, forecasting million margin approximately a EURX.X QX, and EURXX Looking XX% subscribers,

than subscriber we've address with increases outstanding would the subscriber at First, the see of start our and looking suggest price question the into likely had year, respect there half that of to increases the growth, adds QX. continuing to and historical back an user the our up impact to have minimal change data roughly and right year. we some And momentum of of had to price on and point breadth the growth, the outperformance front baked significant a at for into is do conservatism through QX expect this year, the be XX% last our same better. but We in outlook given year first growth, year, half this higher net

revenue, trends relative to the continuing forecasting to basis we and to appear into turning the growth to dollar, And are QX. point given of the those headwind XXX a be euro continued strengthening

increases. on basis growth growth reflecting Excluding currency-neutral our currency-neutral this acceleration XX% quarter effect, to QX. closer QX We further to relative revenue expectations a would benefit the billion, anticipate versus be due in growth year-on-year constant full to we a QX in delivered to that XX% our from currency accelerating price for revenue EURX.X

the operating timing. on through sequential and expect revenue, QX the as on will a small full ramp given price in have standpoint, a profitability and get as XXXX impact increases quarter From loss. the we greater margins accelerating For our recently announced QX continue cycles impact balance in clarity, revenue. therefore building well will a benefit a to improvements of

And with it that, to back I'll Bryan for Q&A. turn

All if you've right. Thanks, any Paul. to questions, #spotifyearningsqXXX. please Again, slido.com gotten go

in they their Patterson in with going preference to respect from to queue people are vote going our question the We for today the be how the come to reading Justin up And on questions. efficiency. is appear first order questions

has and theme for you major been Paul, in efficiency XXXX. Daniel a

As you still actions investment where more level while you opportunities look to consider to long-term have this the taken support be targets, efficient you of see ensuring growth? year revenue do margin your and at right

chime Paul in. and maybe start I'll Yeah. can

that again, things. hurdle notable thing So for the the I had the if beginning I year, of go the of back some One, at the is that really most two really you think, to remarks -- make And I investment in significantly that. our OpEx own to a higher particular, going of you going going new in forward. be is as our indicator investments any great we're view to think should

ahead And which a about year then talked this in probably little the ourselves part that got of I in second investment. of is, bit is beginning the we too,

And so that. we've to related rightsized staff our

about where OpEx feel overall I are. the -- good much we So better and

the to years. down -- extent I our of think that should going revenue in to increase OpEx not past going numbers assume just had forward, the we percentage that a on come that So we're because should you have same

is as all we here backdrop And all nicely well, is invested really maybe the now bit just subscriber I of six to want saw. MAU And we quarters well. translating now remind do the on the of as the US amazing investors on outperformance phenomenal, growth indicators that final leading of into growth

those something, we stay and bit going of on ourselves them. little feel now know because I add So probably that, we're we're already great want a don't made if investments, really seeing steady good from we've the to to but investments you I on about results obviously ahead got Paul.

changes I a made higher if mean, last look add quarter this we the some year-over-year. of quarter One, Yeah. the both the beginning QX had I'll the just you few we and of where things. the was year, headcount at

headcount current see to as innovate become in expect continuing to the we're said, But down goes products We level. new more that We'll year-over-year launch at QX. to forward. ways find moving actually We're efficient. our experiment and and continuing be Daniel where to

good really are. about So we we feel where

will efficiency back have OpEx. even of the impact So the half year of with more respect of you an in see to some the that

Alright.

areas from over again. product about is come AI. question audiobook Justin going to potentially AI like next additional started opportunities see This time? the you growth think for extend beyond or What Daniel, into podcast on How portfolio? AI AI to one even do influencing across we've Our DJ. should AI discovery see the Patterson we

Yeah.

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and very and on be This a that's paying-off to massive, trend you going then which now of been going can improvements many those years. some engagements for churn. that's see nicely lowers is higher retention, in already So higher

lot that over retention So and there's still engagement improve will can that think time. that quite a there we I do

one probably of interactions bucket, And personal all really the contextualize we've and then are And AI generative have us the we second just favorites of comes seen over strong have ability is my content that into years It's that and talks consumer developed, the AI. the phenomenal amazing a few course, And DJ last platform. that personalize Spotify on we to about with for the product. that.

to contextualize of a you're the see entire to lot content personalize think going I it more across accessible. we and where more So make can that platform

investor way you an So, into about podcasting. a high-quality podcasting today, but for quite to an you lot is if think content, easy think really it's it to requires about get it new as

becoming easier thing AI thing. are for about. really higher for it these summarize so, doing easy positive which and these And in with by growth new is, engagement creators, this podcasts So is can turn more of new we what a podcast you which more drives consumers one a merchandise -- can imagine to very course, lot do developments

more I broader lastly, but enough a is think this a efficient. say, I credits people we of that that significantly as then among by believe can understanding more lot company investing happening. efficient part is ecosystem, And would most not probably making in company overall the are But just investors leveraging And the yet become in the I AI.

on audio example you of advertisements quite about generating a Spotify today, thing, the So think a cost ads. advertisers new of on that if be, especially big would great is

video our able here, you're And to significantly takes that see tools for By that we the ad cost instead tested easily to ad, means advertiser today to the formats. AI thousands do having audio. using I across that an over obviously advertisers haven't could or it things imagine having that generative but you you been networks, be text as develop and reduce that going can using of to and new you can you in able do think Spotify one

across just itself. where there's efficient, be So all but drive be, stakeholders, of going the lot consumer going creators, more which not consumers, really value for to side lot more and those Spotify entire will company, to on a a opportunities the we're become

Okay.

from terms question and place churn price Matthew to you is come does gross owners on assume is price do quarter or going incentivize increases. next to third of in terms in guidance of Our timing intake? guidance, with And Thornton increases? in assume structure content think regular the and now revenue recurring What a subscriber

that. of part the that. Maybe take I'll Daniel second I'll first take part of the let

assumes guidance think I the this won't then the take announced cycle. next have price won't increase then it So on The -- way a and until billing Most a price We price increases. is yesterday. way. notice increase about period, people effect

won't and QX on increase of month which until quarter. most for why won't the month the somewhere So a most the of happen they until the I that September, last subscribers, of in is they probably a have price will impact price said last minimal because increase see middle

see QX. will pricing the increase benefit full You of the in

acceleration So QX will and growth a than see QX. see you'll you bigger revenue ARPU in in in

I churn in terms gross there's definitely In were the my I some which of prepared baked intake, my back numbers. we comments we made into -- comment conservatism not will would on. QX something it's go to remarks, and

in we've or you and gross very minimal trend. If go in we've the times, and we've we've from and this seen on raised churn said positive We've minimal on many when back We've impact look results. intake. seen past, historically, seen impact variations prices, churn publicly

in the to that reason change more case. wouldn't made past. much broad-based no is This a obviously be expect we've and there's larger the so than And

So some how out. kind into there's of baked definitely conservatism QX rolls

of it question. maybe, half to Daniel, that then And I'll over turn for you second the

Yeah.

second So I the already. on price was around I allows commented the increases. half recurring structure regular the And think that that and

we've to have, this, addressed I to I my we XX increases. in opening done price in it so overstate obviously, the one I done again, already, want this date, think, is and past, But, our in but to I over the look don't biggest in remarks, it at we've our at overall grow I XX% believe toolbox, should our you market we're and outlined but tool revenue per targets. trying is the grow already as all a it basis as goal think,

there's of number user high because the term. important take population to toolbox, tool then a then so preferred optionality. even price And doing that three massive there, the but, in One Sweden and as more keep example tool consumers. already that. is And obviously grown verticals price part products, When of to down, growth our value course, more great ways creates increases way longer a in of of which new do the super also the our we new through of where the grow or toolbox. slows we're That's that an revenues is another of have thirdly, the course, becomes we at have

toolbox. have tool in the think yes, that So, now I this should a is you assume we

another second SPAN? linearity ad ad provide Can the and of from can into the And quarter got Matthew quarter? We've third market. market about talk the you you question through performance Okay. updates any on on and Thornton

Yeah.

on not pretty better So of the relative although with the our some first the line so solid the than definitely did our was the expectations. to throughout expectations. quarter see that was half, We back quarter, improvement quarter the out half outside

XQ, guidance. into in which better even our be to advertising expect We is baked

quarter than So we in on from basis, a in a neutral QX. saw an better FX growth perspective

revenue the was rate. at the Podcast got ad then of quarter better It helped terms a outperformance. in And revenue. as big driver progress SPAN. of throughout growth definitely podcast well SPAN ad

big that. a So contributor SPAN was to

All right.

you've the you going to you the pricing. as a with you announced referenced scenario is with revenue seeking agreements? yesterday's incremental to conjunction in current Morris. In consumer your the about question raising from detail on Will Michael at the prior Can win-win share labels next same royalties pay past, come Our achieved increase? win rate

anything are believe, the about is we about that we're, good But per again, into feel will we situation pleased to dive between we but where and that And partners, going I'm with very in situation. not our think say being with it. quite of I course, our really I I Yeah. agreements as specifics our I a in like, usual. this us. often, this is partners That of a kind and this see the put feel I not relationship win-lose past, is mentioned in how where

the And to We we and the very really of growth be also feel much focus parties at where to we're create But of is of that's our a see kind the really a music not Spotify, and for it really I and at main the about for I but both increase our as, economy. a good that's our a are pie, situation with And us win-win. overall we're win-win, where feel we zero-sum win-win part partners. rights overall like with growth this both the is but with of that's like price a game, are missing. I Spotify with we're growing pleased partners. really all again, trying position at And the feel goal often

All right.

Our QX? from Can currency, will declined X% contribution down ARPU. whether these is mix negative the the increases impacts to Mario and to Lu by be able announced from year-on-year, market product next you excluding help going last offset question week and the quarter. on two break price in come ARPU

Yep. Thanks, Mario.

the biggest on decline, on the X% product quarter to neutral the FX of the the impact the majority was That was So mix. impact ARPU.

meaningful a in FX Looking in benefit for the X% neutral QX. moderately as should in We're then QX, out, to ARPU down the FX the into ARPU increase full QX improvement we QX. flat of of in price get kind expect neutral looking will increase help we price and in

minus zero this QX this positive. at but and in X% point, call of to X% nicely We it guide minus quarter, the QX in don't year. obviously positive then QX nicely this So

Great.

Rich Next Greenfield. Spotify? for deal How with should a we TikTok think competition what about groundbreaking new reached recently supposedly means question from this labels? the with

the with is is competitors, obviously, something new. competition formidable we've dealing nothing company, we since start It's one. and and, again, been TikTok many Well, had the that have of

improving over this really, been investments few think and speaks years in feel I of that for I quarter results the themselves. All users the yeah, of outperformance to again, And the doing expected I the with past about mean, subs. outperformance good that in that value in our care consumers. consumer said, position really isn't such the competition kind competitive we've we're so in is new. consumers large many like, music. having especially our improving category and anything It a about,

So more really add to that. nothing yeah, than

All right.

is Lu Our from next Mario question economics. podcast going on to come

quarter improvement, us can the second year? are we The now podcast where of gross rough a timeline give breakeven ballpark of you versus within right margin a next

Yeah.

rate of I The on continue side, Investor the We improvement Day, see we're track. expectations relative gross on gave on say right would the we the margin at to on improvements. podcasting that the all the to

all in podcast improvement about and We at we the Day. And margins. breakeven laid think for really good I we all and we hit Investor out higher expect podcasts feel targets targets the to the laid out at level, a

you to the in Greenfield. the got through base Plan the Everyone from we think but your single $X tier? then pricing Family How of power another also you Family do a And increase Plan never pushed right. Rich on up, April which about base gone All has raise expecting user price versus XXXX. was question you

pricing mean, well. I the as the tier, both really, consumers, it's standard but obviously phenomenal family Yeah. for again, value,

up before, we and So a been, about waiting think that's and more should past, And really reviewing great you in we kind offering. how of value, it. and as the feel it's said building we've

to whack, toolbox, consumers. build We assume the are value now That's and and prices which to we course, start. value that, like where have price is is our new when trying relative out you the Plan, plan. better then about ability raise that is an we And doing a proposition of to value we ratio standard in we gap, of should to the the feel we our Family towards have more that good even feel tool getting

tier another to opportunity the that's So we prices that have raise on.

think is that economics. a streaming premium? Okay. be a may We've other streams from you market value music where Do higher Matt music ascribed to question perceived on Thornton will less structure streaming the premium as versus get content to got perhaps

obviously, rather model a and make discussing this the think contention. always tweaks to for I we of around participants constant platform, centric kind economic and fairer, we in big How is with the do what you're fair the can We're partners premium supported and around the sort difference than more ad we're And we that. always reviewing variant probably between on of that artists our a is we're how dialogue as making can many make parts. do model. model how

artists groups doesn't seldom think we've artists studies is in approach, But around do. you user and it investor impact an view expectation differences what if right leads gigantic should do other. centric that from it people that artist the of change from perceive Spotify's meaningfully economics actually or the the we most holders an is this how to or a however, on to we it of centric the these is is, most even I This divide point done it. to or it what way that more one pie

discussion but hear partners, more artists. and and we're we how in with of system about again, open data make more we're to we see fair always we're they're sharing constant to always our sharing what course, the can data So back,

and plan Could different you tiers when were Alright. and if your you report this release the What on next planning a Ripps. you launching question switching engagement offering? on comment indicated later expectations pricing tier Hi-Fi across are from this for June that year. Bloomberg Maria

has that What we something call of of that think any directly has don't the really we market that streaming more to on further, value, how in, in to things. obviously, to as that point. we do make one features sort don't We have the something anything tool around remains value new have value tend and increase will to them. our but We I we interested or is Yeah. and announcements towards we're that could future, course, in at consumers probably Hi-Fi have announce this this say any to, aficionados it's use even when but

right. All

Matt interface. the have engagement, how user along of retention, you or we interface, else seen, are and new new from What on in question UI? that impacts rollout conversion, from anything far the Thornton Next the user

Yeah.

because to is user may So for was not aware be using it that systems as we again, had the one on shift importantly, pretty those the believe that were I results. we the outlined feel, well. that largest what interface made and all announced back a Matt that seeing On. ever the user machine but as the the end experience, is is we've learning more signals good rearchitect look back And on And our referencing Stream to at both we're single then, we

are tweaks those on We we lots have of based feedback, which lots normal. and user made tweaks. is making And

also lots on based making signals. our recommendation We're these new of tweaks on

it's I So we really an but entirely where system. good feel new are, about

lead better to as increase. will to lead over long-term better time increases, conversion that tends expect should to rolling this very And, we're retention, with new We to And good tends careful over out. be engagement if of should this very, to rolled course, remainder So engagement out expect the you which how it about most in you being of that about of we're it feel And well. turn UI. it. year

any Last genre Okay. types operations? is or a about you We've original content some more on not strategy quarter, you're from now? on under focused podcast there detail underperforming how renewing got And canceling question Ripps your you provide that or Could podcasting. evolving demographics further content. more streamlined talked Maria are audience regarding

Yeah.

you're out. Maria, think, I rightly pointing it

doing lot strategy I biggest didn't down a shift about, more work. the operations more that's stop renewing that that we're being And think the really that we're careful going the things I data work and more streamlined now that and doubling consideration is we things did and in the around, around think that the primary our have through.

point of terms from any in number growing. podcasters vantage or is most my demographics, the think thing interesting I of the then genres And how new is

So before native saw you're very in unlike that. to any seeing more and we the the platform. we kind people brought innings we perhaps new in made talent come media, to announcement, when and then didn't the where podcasting other of and more And early that form podcasters do of new do were

Now great video we're creating they native where for have uploading with a I And (ph) lot seeing video that and on podcasters of new that other on and great Internet our are creators we're a now realizing think these of it. [long-term] is seeing Instagram content platforms now success. all who feed podcasting YouTube example podcasts Spotify one and more

it's then that facts, older of format. the you're on So you're very great about we well. seeing just for the cross lot onto It And are really example lead musical of consumers and side, consumer loving a base seeing, a not great when but taking tend appeal. show, seeing, obviously, be referenced something something realize broadening the also much results as to music And just women brings Alex not tailoring like is younger then It Daddy, Her up getting in that artists Cooper Daddy Call much could streams could the and podcasting Call the be something that. we're funny. good on content to podcasting podcasters. of to has type Feel younger these that but new creators to starting and consumers, Her to in

sort onto that nice halo shines a that So the of well. brand then music side as

the more lean which to And going the more So younger has probably for importantly, will as world that more well. efficient. it all that's consumers being creators, be shift the big to expectations. We're of around course,

right. All

and in Next Do year-on-year expect question given the Doug XXXX? that marketing. sales marketing from the spending Anmuth XXXX outlook? decline on heavy MAU to subscriber from and back how And decelerate you of or premium half your sales does and influence

as back in accelerated last of mean, year. point out, half Doug, it I definitely the you Yeah.

the perspective, comps kind you when a what of are So are. they think on year-over-year about

that's the delivered where a seen have number LTV/CAC, and again strong two bit. It's and one. and a exceptional period time quarters underspend And back of and subscriber after of So kind we kind of is of still couple in user rising marketing what we've always dipped growth is little had nicely. pretty been rising our last Number growth. which

improvement seen we've cost improvement perspective. really We've significant -- in LTV/CAC. gross a an ad per seen to on a to So LTV per LTV

So play. officially we're that seeing come into

we we've kind going the changes factor or marketing guidance grow. plan any is and all. at given to how of It's of terms really big part of to be change in year-over-year on in subs always So marketing users not a

I about word, and its really factor. once to we good of we get our you for life there's really carrying that's When flywheel terms I launch really of forward. of many think we And we sort of take then a better lack You markets. started growth, made got, a think and it's see the the that that, on take in awareness Right? in to into efficiencies spend to about have of it own hold, that starts go So markets. now really, marketing feel new actually, new we've good sometimes you feel markets,

Okay.

on content deals. Another one one from podcast Doug Anmuth. This

XXXX, As some building years podcast later potentially and comes where renewal few up when through content a from were this thought is you your and out positioning year different ago? were for podcast meaningful you discipline how process

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thing markets to important and chance underutilized in were and kind breaking a we had in of podcast contextualize we're we investors. overall But world. around by We marketplace. is one a And most it real under-monetized thought into number when position was So where entered the the were consumers today, we nowhere field. the we that most for of the

media a good feel to proving is really It be it. and about we growing category,

the the impact and I bet it's and to good it really having So played overall, and retention nicely, our churn. all and on was I engagement off think feel has really lower about right make

really, really about good So that I part. feel

data. we now lot also Now that a have said, more

have We have does data what about to et to podcasts of we acquisition, lot user retention, across a to subscribers, new millions the that more to cetera. already conversion,

we're what work some audience. well of that finding shows surprisingly, our not And these with is really

of don't well. them work Some

a of as probably them work done. we we relative have to different during well, Some what but cost should structure overpaid

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-- short very But time. of a given is in in, that in much really win period we as I to this space order we to to as of kind data think could get and gather went normal the

And much we to so have allows and the us obviously make better data we four rich is decisions very years ago. than now could

develop And got given All right. margin. gross We've more led to the video of the favorability in the other how platform? that a What the to from might relating on question quarter? of revenues introduction of cost Kramer Richard

Yeah.

So streaming that. service, on two the compute our is One is things one. delivery other delivery cost there's really customer sort and and being the on streaming bigger of

rose, back -- a they again. going we're really through that Last has a ability our they're of and we us, of of and now streaming period as a that think couple of the if business the you us. I remember, so down, in really last cost declining helped better think year, costs it. And a of gotten they time maturation revenue, the some position at and of delivery we've compute where after lot and percentage to for year where forecast is were saw a honestly quarters

as forecasting on costs we those it managing business to can a video, if that's to become the as respect enough But handle have and better with something we'd forecast There manage forward. through portion, fluctuations. properly of well. sort now we a do to it. like feel always a big We some variations. again, might to have were going be And models be have always There

maintaining we of other on we're of feel at place lines. with we're kind like of some pretty the in So a good those revenue levels costs

Okay.

about to on it and product make to one the about power How power. ability Doug term Spotify's pricing do Another more long users? innovate continuously from to think valuable over you pricing

it how that tier ratio the consumers ad-supported think their price we're increase about the we we we platform, that our Yeah, subscription is, increasing really sort that if no have. tier our The give and paid on about thinking of value way Doug. value constantly we they're matter can on to or kind of

the be think, on over raise on sort ability platform. value well to So of should we're we to long consumers our as towards narrow then on gap. so I focused to more to value pricing to But over-delivering time have our always able consumers, bring going as that we're this

about And think then really innovation, feel the when about good that. I you

across that we've remarks, are quarter, our as introduced As shareholder and clients. number the mobile I redesign just the desktop quarter, could deck, on I opening the the all-time on experiments in mean, see an we my we're client. we've despite business, made mentioned new that improvements. entirely at we efficiencies last now the an high of Last of in you in our did one doing

We updated Tesla of AI and these the partner DJ We've a updated on and We've this quarter. experiences. of many and on all number consumers of wide list improvements. on our of introduced have to goes

still is have going business, how not this And again, necessarily nicely, relatively may to in podcasting very investors podcasting understood still is very similarly more believe Audiobooks very, for on. Spotify, I even big be early. and growing early long-term, nascent to

Spotify. in few one audiobooks think and will say, fast years that will look we a where the quite next I be wow, quite for meaningful back became

consumers the us then price I time. being lots keep we're an have appropriate we the ratio able feel value good to to to to that prices that, of raise ability to So doing And about at over value I believe add really if level.

Okay.

Our this into trends the your decelerated saw revenues can next you discuss expectations? question July? How year-on-year to quarter. you on growth to through from relative digits the terms second going Zach in of in is perform mid-single to And did Morrissey and Music come advertising. ad the quarter

Yeah.

the So obviously both forecast. with level, premium on both almost heavier the and spot to you our at we in we currency at those right side, high on, line revenue are with advertising But respect expected. a of with internal We're some dealing side very than look our if was own expectations.

really So in revenue much in to line. podcast line podcasting But guide music was to right advertising don't expectations. We better. was line was I specifically. slightly in and or with would music pretty The say

And so advertising good overall. trends we in saw

ad premium right again, on or expectations. with revenue recap, of say, side would I side difference our a much So line, not either the in to

net increased impact And We've right. premium Morris. prior announced driving that variability? factors All subscriber adds? price outlook, the promotions got level of the is growth, are are year's from a the much Are there activities driving Mike other or question increase adds? quarterly quarter net below What third the is how expected that to

Yeah.

probably take QX step just We outperformed first look of We sort at outperformed in QX I'd year. So a general. year. back subscriber growth of of in this and in this

you sort period accelerating If which a added we've of over last any million months, XX and subscribers, growth of is subscriber the trajectory phenomenal XX-month look net time. at over over XX

really growth has growth user subscriber been really, been strong. even So better. Obviously, has

XXX as last like added users the million months something over well. XX I think we've

strong. them both really have So of been

guidance, last we additions months this when expect the first of in nine-month year. you we relative over look a net to nine year up the months And the be nine period, had XX% net our of incorporating to first at in additions

level one, with to guide set. in the in we So absolute QX. significantly that's just well, sort And did respect of outperform QX, the

how always there's it forward any, a our from we pull strongest a if from perspective. much, subscriber given question was ever QX QX So into of QX,

in done I thing very extensive mentioned key there. and this some price comments, our so there's in markets, my in conservatism in some done and in. some second increases never the baked as them definitely The We've there's baked is, of conservatism past. We've

So to over in the overall feel when months, look some And this I year. the made XX general, kind into year into months, on QX. the great made subscriber we about throughout trends I prior growth to nine user the the year growth of comments respect similar of I and in last with to start at growth, last the of terms subscriber you both again, over think of exceed the the and pace comments we're

really about both we the So feel trends good sides. on

time AI right. going support Benjamin trended now few Marketplace. got incremental Marketplace could a go new All DJ We've like more How has to to and growth We're growth Black on questions. for here? products

has So, Marketplace nicely. grown really

while. updated haven't We a little the numbers in

it contribution. in gross or of we numbers last the think about profit so time updated I XXXX, was million EURXXX

again think and of grew year. it I we XX% significantly last we said grew north year, this

to driver. So be Marketplace continued significant a has grow and

-- new artists, the our products well as will We're benefit we that as partners, consumer. New think products. things always always we're launching the launching different

also artist being So we to, we'll trajectory continue and think and to receive community Marketplace more has the also a from importantly, innovate, they participant. still to of a nice a from benefit being but financial additive standpoint, the

competitors? And monthly Can quantify from increases will from delay price benefited how versus users. to Kelly got decision We've a MAUs question that Okay. you dissipate active the on much now? Jed benefit

Yeah.

say again, it have the may it back about had churn in impacted. not we think think impact on we would not rates. look at you I anything any on subscribers increases if XX see because little But data any we've or about I so subscriber conversion I impact go future that or side, say far, growth and again, don't users in have the would price growth, price I the mind, and it on referring you're seen free very data of terms based has growth monthly active the But increases we to if impacted, that. have the think -- may on on with

really we're reason of that's this right is So to feel good we this. position about in time feel the why do and we why the part the

it's So don't impacted. my expectation course, that know, while meaningfully we believe of is, is we can't

Okay.

are is from of clearly is ad or revenue there the twice market at question in on But your Next The advertising product revenues. growth? Rich in else willingness soft. growing terms audio MAUs advertising ad that's rate dampening advertising. supported advertiser Ad to embrace over growth Greenfield anything your

a say, I the would that in explanation just growth then, little timing. and seeing the where the I is bit are think, factors, about we around really Rich, two delay part of

advertising the say, of don't as, we're some have growth United strength in States markets that has. same So the of seeing generally

to the they think obviously, US. you the be on much about ad the than the lower are the are of when there side rest ARPUs So going world, in

So ad MAUs about you that's explanation growing. some of think when the

when part usually then can you have you growth is, catches up. all the you're other very growth, social follow I fast, at and looking few the takes as market platforms this this But before see which think rapid ad similar pretty it all a much is, reacceleration media of trend, or quarters platforms,

of user, can that user. think start So monetizing some one-to-one time, not the players few too, the course, a other than that. at go you I anything before And I up -- it and will back you in when developing space well. start lag catching instantly can markets here, look over more quarters usually a look then, can you very do think part. a you It of that takes the else. it sort And of is And but as of it's see when see clearly you

advertising today What We're advertising reaccelerated Benjamin nicely characterize source turnaround? last would And on how environment? you take our question was from the Black quarter. this broadly, more going podcasting. right. the the to Podcast of All

quarter, which So podcasting in helped the I there's think things couple performed One, side. a on SPAN of well in there. really the

areas came a side, of came from our podcasting ability in to on It improvements in general. deliver lot from better that. and of rates of it just the So kind all sellout

was podcasting So what that's the in side. really

I earlier, quarter. advertising podcasting -- said the As better advertising get throughout the did

was the -- the of month from month in rates, the best podcasting a quarter So for us growth of the terms year-over-year last perspective.

our right. Thanks, Q&A wrap Ben. to session that's And up All going today.

back call remarks. the some for over to Daniel turn closing Let's

and really provide customers strength offering. continued and we and Spotify, I'm was demonstrate outperformance. great It the energized The growth we value announced the for to our our quarter of a historic Bryan. Thanks, right. increases price by All and our yesterday

last As you we're at laid a out team, positioned and on for ambitions moving year's than also we're Investor ever and better the we our Day. potential faster to the deliver

second are XXXX. half goals, heading I about those the making our towards confident into of progress and feel tremendous We momentum

will released So thank today. you out as check Record And For our to free usual, all podcast, feel which for later be joining us. The

today's All joining. Spotify call. on right. on under Earnings Spotify Replays. for will our available and And replay app website concludes the everyone, be also that Thanks, A Call

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