Spotify Technology (SPOT) 23 Jul 242024 Q2 Earnings call transcript

Hello, and welcome to the Spotify Q2 '24 Earnings Call. [Operator Instructions]

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

You may begin.

All right. to Quarter welcome Call. Earnings and operator, Spotify's XXXX Second Conference Thanks,

Planning us Ek, CFO our Financial Daniel will and Analysis. CEO; of Joining be Kung, our today and Ben VP and Interim

be questions comments vote opening can [Operator and afterwards, your with start Slido, happy can and from e-mail answer ask We'll to Analysts they to then into Ben, question. Daniel and some we'll directly Instructions] questions the participants can Relations questions. reason, Slido, find access don't have relevant. and for on ir@spotify.com the If you your you we'll Investor at in all most add

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

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

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

And with to it turn Daniel. over that, I'll

a it All quarter right. Thanks, Bryan, across team and want to very strong was metrics. of hello, by saying I start everyone. most our

that great a ago quarters be that said product, could prove few while to has business. believe needed we a recall, great I will you we that many As Spotify a also

show this to we're really think starting I now.

margin flow had we our teams, ever. our also hard highest work expanded beat we to cash of on the free subs, and gross Thanks

a to of focused marks profitability year me X execute on as describe consecutive continue This quarter what monetization. you've also heard on we as quarters

builds choices plans, and already world, offerings access of our we list who So more Premium By introducing like also Well, of Mini looking have to subscription on types our different we the Family new tiers content. giving subscribers subscription that how Duo, done even the this? for passes. listening expanded Audiobooks, robust we be Student, are around successfully options with including Individual, consumers and basic have might plans

to addition increase markets, which including several this expansion, great a implemented In with we're in success. price the we out also in now key rolling U.S.,

already attribute service we've measure. seeing less any we're fact, in our over increases round our in of did the In was than last added this this to very the several value tremendous by I churn prior one, years. we to low which

now subscribers one audiobooks, music more content Our deal. cost get today, pretty access much In the entire outstanding the in subscription. access more $XX, user approximately a than podcasts, a to of significantly than course, Spotify of Spotify experience. would U.S. world's XXX,XXX pretty to all million a X this and catalog remains

there's one overall outperformance that. quarter into But do MAU, to our get in I this so and that's exception want our to

of the segments. reminder, through business and is As way a Spotify's free easiest the understand lens our to paid

growth where markets is subscriber and pricing. developed in additions today strategic anchored primarily by is business subscription driven paid Our net

other a to hand, but potential the convert see these focused into On where markets Ad-Supported segment we our subscribers, today on horizon. of on is longer developing the users growth time free much

and how marketing in reinvesting have attract spend strategy. see to going users broad listeners the strong spend, already of ROI these importance market if talked ROI awareness And about it Spotify, And money meets user expectations. penetration we to we're changing a our high So markets while our our to only developed from we we think today, dynamics marketing markets. looking to while are play acquisition about we where in attract at our in role new the

In subscriptions here. So markets, high aren't slowing it's even signs really of showing levels. paid these about down historically our resources carefully acquisition from targeting

users of side, number we markets. significant a in attract flip the to large potential have On developing new

However, as conversion a makes from paid bit these inconsistent. the users can acquire difficult of be markets do same spend. ROI it in little a and to get them, to can channels be different bit marketing slower. level the Engagement more looks This our to effectiveness these

to doing we're tackle So our things. MAU X challenge,

marketing to the our impact we're efforts pull of quarters. a levers over First, we believe intensifying the to and number improve of are there upcoming our

on additional free retention, into our improvements based and performance integrated boost Second, we developing our markets, in markets. pipeline in be product free are experience coming the will Further certain in existing prioritizing enhancements engagement in that, especially should our months.

our While I The when reversal overall I confident if. seeing so healthy engagement rather the MAU reason feel I than more miss, am a an year-over-year. that MAU trends see with as is disappointed of we're

the indicator So leading value great users acquiring also which we're for are future we retaining, a is now and monetizations.

of the top a quite longer from and evolved Premium you, the some the conversion offers listener no we would and paid discuss I of know time, of free we're standard means tier. revenue This this a on our I to subscriber scenario, free offer. to to in less straightforward: one-size-fits-all growth dependent our This new midterm. want I fuel to to mind between a growth relationship developed to convert increased is think the means the the and over our number in come process free impact short was so of users funnel short will has in developing what bifurcation on now Historically, for user, be midterm. and MAU our given markets as subscription

Take, of paid affinity many the directly subscribing Spotify products, strong for users our widespread for both tiers to markets. we the our awareness trial any our and see period. With offerings without developed example,

to those revenue gives to engagement high as for raise the even us in ability tremendous continue prices, Additionally, in allowing our strong these growth markets markets mature. confidence

today. to linear path transform close, our business, It's goals to Spotify ambitious go We any back To one ways I many a to on are very I set and not opened. want metric. dependent there to grow how out

We have ever. more than options

continue But over growth time clear, that capture doubt while the on be I very top-of-funnel to have to we we monetization. also focus also no will

I'll it to up then turn over Q&A. it for more now Ben provide Bryan detail, open will and to

Thanks, bit add the the our and thanks, more color joining everyone, and touch to Daniel, business of like and a the on I'd performance for then quarter us. upon broader outlook.

business, across another marked the strength quarter QX profitability for and strong record trends, improving of subscriber by monetization led metrics. all our robust

subscriber than price, markets funnel greater again where was we've of strong. particularly in at healthy variability expand growth. of to MAU double-digit be year-over-year our continued to rate a expected, And conversion, developed our taken continues recently rate Although

net X in forecast. quarter, subscribers the was which million better added new million than We X

Total revenue basis X.X billion. to grew XX% year-on-year on a constant currency EUR

growth recent XX% mix a by basis Our XX% growth year-on-year. price year-on-year accelerated on Premium business XXX shift product basis and ARPU points to currency-neutral while of our currency-neutral increases improving saw advertising

a Our funnel marketers be relative QX to on ads as campaigns bit was brand-related to continued performance spend slower upper volatile.

Moving points. to XX.X%, the towards a Day. basis out profitability. our XXXX Gross XXX at to guidance The record QX we margin you nicely targets Investor of continues inflect by for came surpassing business laid in at

content can QX's are cost outperformance As aware, and move components music driven margin gross that by primarily favorability was many you're and marketplace. there our well

by record, million by accruals, was set which share social a during appreciation XXX EUR profit forecast, million also EUR lower new XX expenses. our higher Operating charge the and noncash driven strength income price quarter. gross XX operating were Operating of aided impacted than million in EUR by income

share As of a price outlook our reminder, our we outside forecast they are the control. in for don't movements business since

operating EUR income XXX noncash a largely was record free as Performance favorability. typical million flow as net net Finally, profile working capital cash of was here the our quarter. by items improving well in fairly driven

XX an from subscribers, million QX; million Looking an and forecasting XXX of ahead over of QX. to guidance, are million increase third quarter increase we X XXX MAU, million

pointing We consistent are that currency-neutral revenue. EUR billion a sequentially total forecasting in QX rate growth to X is revenue also with

a We also of XX.X% cash generation. stage quarter gross of and the setting anticipate free XXX operating flow of income EUR another record million, for margin

we our the half also add product exploring we of of of adjustments activities contribute Daniel as both potential year. progress the growth through to MAU as enhancements, marketing and anticipate terms continuing net MAU to improving In outlook, we our make to back mentioned, levels will are which

price and to growth minimal show subscriber historical QX, had in data increases increases continues price our With have that respect impacts to on growth.

in However, baking much QX are QX some of like levels churn outlook. year, into our modest we last of

This on is compared Additionally, start growth a we in anticipate XXX range. increases. moderation year-on-year another XXX in QX quarter price year's of the sequential a we to currency-neutral slight improvement we likely lap point as basis to last in saw what to QX, in ARPU basis

and balance gross operating of we to expect From sequential continue in through operating improvements income a well standpoint, margin as as the XXXX ramp profitability margin. in the

that, With to Bryan hand Q&A. things I'll for back

questions We'll appear their people the in be All order vote the how [Operator Ben. to right. the questions. Thanks, with preference Instructions] they for in respect reading up queue

our is to on question Patterson monthly And active Justin first users. come today from going

the reductions markets? being MAU taking end evaluate you expense or in more What byproduct factors penetrated growth? simply do you you are more weighing MAU a of believe on it's As to your growth, more actions drive

want can to. that you plenty impact if easy room on not Ben, to this believe think definitely answer and you grow. is TAM. it's I'll there's one Yes. Yes, in, We chime I of still take left maybe an the

my introductory course, future said, the to that behavior as developing very markets. markets. remarks, markets that some trickier And of growth With developed of come a looks are ROI that lot to from, in will, in developing noted different positive because I get relative of

different. course, ARPU little bit bit too. So are a Engagement channels of profile a looks And looks little different, different.

for And is not so back sake. we're the add going marketing key to constraint just here marketing's

to only correct. take on get mix basis. so when works some time ROI And that do will an will the it We

So the buckets. X actions in is kind of we're taking

One that is the around marketing buckets on of channels we're improvements the using.

these in will than play in developing bigger markets. role So markets partnerships probably a other

So we partnerships, help. which of types will are we believe more doing

kind further adding will some improvements optimizing in of in acquisition those is that we in of some That developing spend, and marketing how do is the too. be territories back Second markets.

is me which third there, then And you bucket about too. product around heard side, the talk

marketing already that believe months, out And the things when again, bit still positive. out in certain that engagement, those And higher roll the markets we have on things those have over to us engagement a get has coming you'll allows that much we ROI spend we we profiles. to are then So little more increases, higher better if which rolled engagement. do then see LTV

many -- when come about we go if to it quarter and you rather this that and bucket we've fix But been am even than happy back a of I and this history it will different really too. a really company, working is to assurance confident that things. I'm our that of say, a each question needless the more public And from time to it's me than if. many And the hard this time, it. something this the in situation we're miss not an gives So a lot be is back every of as that in case times and

All right.

talk to dropping you the Anmuth music of Our better next on gross leading from other about about margin? being going line podcast savings Can question should the bundling margin. profitability think invested to drivers is in we to areas? bottom gross And versus down Doug to come how royalty and related improved

is great a questions. Doug. This series Thanks, of

a gross each up that go know, margins of into you As factors our quarter. move there what are down and number

And played and by call has as we margin said past as certainly podcast growth. cloud been You're part path what areas improvement fueled gains including that right like year-over-year out the Marketplace has profitability improvements to in delivery sequential in streaming other the our about quarters story well a spend. in music, to

said in parts about our I compared as contribution outperformance was cost mix. In the quarter Marketplace, primarily the although are terms content within always remarks, to favorability in there of this guidance, my music moving

confident look, about of and deals. here can at bundling, our on question in all I'll on many what the is we're treatments, say we're in your that position of we the of won't this We that regard. that that bundled is terms our platforms In mechanics specifics not sort say path very take the unique so point. we're But commenting of be

right. All

question Next on Justin from Patterson podcasting.

industry that like a nonexclusive, attract largely Now podcasts, how the how grow do changed platform to you on engagement shifts of major creators video are and podcast has more engagement YouTube? Spotify? podcasters versus more As

Yes.

of podcast, first podcast, not and it's when higher a organically what with audio And we engagement word-of-mouth where we on And positive seen changed. bit really we I is video even engagements only, creators. sort which have this think is do testament. a a healthy sort are creates than very we think seeing I that have see has foremost, what of of also is

now really It's video content, more too. creators growing seeing uploading nicely. we're So more and

have as is. it about X.XX already We million

the way today where especially this actually care think about I much I things between but think this, They're audio, sort I long consumers of format. think effortlessly, even will And reading know term, and don't I about of moving consumers. really in younger end, too don't of very video

will make in so to many And creators that as respond should obviously possible. their as available content and formats

that of attract a creators I sort way kind of the we think X And bucket more of is things.

I think platform. is the first things So to native Spotify are bucket that the

things are bucket thereby they'll of to add sort So see already, prime higher monetization. like convert engagement more and Those things a podcasters musicians. like higher and because

most of is uploading Then costs I if to a platforms taken today, other already. second you're which already you've your video think there's bucket,

you against a you this one amortize sense many already too. to platforms. on people to are of see some platform, as lot And platforms to are behavior but it to on for Spotify, try uploading not side that as possible. a So happening of to we're And lot cost uploading the short starting where makes just that of see many

think, I Spotify platform that will the lot perform lastly, a then than platforms. other perhaps And on better on things there's

longer-form For works and something history of go and instance, see and of platform content video the on Spotify goes. to well a back our what forth is that foregrounding backgrounding Spotify is that lean-back because, we on course, between really because as side do well people sort really on do tends

and improvement, day. of are of more with creators to each and for nicely it's platform lots course, the looking and very overall, more and So coming every

right. All

as is decelerating and from does Advertising get not ever Our MAUs next revenues growth XX% given to advertising. increasing Why is question hoped? Rich dramatically on of Greenfield had faster? is advertising of large the engagement. it growing base Daniel How

maybe can don't I some of that doing sort I expected best And Rich, important things some turning than it in is on. subscriber, you business is bit into is part engaged what's consequence, we're paid that which, subscription a are chime taking an think, of well to little and probably our bit little net advertising of to happening begin of side, more users going Yes. the Why But story then, -- course, that on Ben, better of have highest a macro as here we start, our customers them do. on one the -- and best potential we as on diminishes of the too. a

that subscription So the a mix part improving the on of is favor this is side. also in

that more we lift not have is And then do. doing thing lot would been course, pretty have been doing a years. making to is say the that's, It It's investments we're that the something past I programmatic. of that that and enable the over overall, on to we still the to extent a of would heavy of like we still much few side, second platform

expect platform. us more keep and programmatic and automated the more and buying definitely should bring to that onto you So investing in

just that. on And add to Yes. to

our sort state. know, top that, platform. kind sort And seeing the that ads and enterprise-heavy in that direct an we in volatility And state, we're quadrant exactly of our of on in current of, all of it's market. business funnel current you upper sales, As are brand-focused choppiness is its

is what for and a that to here, for Daniel highlights diversify agility us away basically from as tremendous said think also really I ourselves. that But opportunity create

the able businesses it into emphasizes kind by of think, particular, said demand and the programmatic, and new as spend to access small- sort well. think in medium-sized that's of presented Daniel I just around in market pools everything I being tapping

we're that these about. excited think forward-looking are I all opportunities

Okay.

is with you industry. come the legal rates? question the next from on your action accounting And clarify Can an of music MLC? also the Levi backdrop labels you going can for Batya on provide Our update lowered the by to relationship the against taken CRB

of of really chime I've which ongoing will I sort the comment comment on processes. talked don't a on. I Why you can maybe with and the But our I before, then, can't labels. about sort any quite about nature anything Ben, is legal relationship lot start something of

sort for win want And in to make then win I at not where we look a this they much people zero-sum a them have We it at It order lot of to how think of is to sort we win-win. lose fundamentally and of game of to or have we this view lose. all. a more

numbers, or side look increasing payouts So when I on label our at overall, the keep the year-over-year. our whether publishing we side,

So we those going the course, we label even same XXXX, last true payouts have on of on. and the XXXX. year side. in had beat be record the year, will, more on will This payouts numbers publishing And side,

a it people not is So zero-sum believe. make game as it much out as of to

here things of that is relationships. around various had would But with of various That's points. for not to years, music is the healthy supplier we now as say of quibble XX distributor the nature There's the don't growing. overall, I've relationships That we're the have at say But been company. we sort that sure. better for part at all about, things industry always overall, arguing the music I industry and

about making we music primary something as we're of sure thing We and a the doing growing. spending company mission entirety I effort industry as of is the think this about that feel a our recognized across that And lot that it as and are that. time company. That the we in good keeps deeply is core well, care and of

industry healthy an growing. time, keep You about music things these of all and focused on that will is get as the said, always various over that sort growth, industry But time. arguments into see over keeping we're us, growing,

of obviously, sides the think, of I the There's what just and publishers. coin holder to add I to labels. the MLC here. two sort the talking side that CRB, pertains obviously with think, about asking to different that, about respect rights clarify, we're with you're to And Yes. And to obviously

We Look, our And it a continues lot it's all complex time where licensing I'll do accounting we're has say here we're here specifics get leave quite won't out that been never we specific and that. able matters, be scrutinizing how and I spent into in that that at today. the I'll to a of matter so that to is we for be of net confident position.

Okay.

pricing. Anmuth Another question on from Doug

to While recent it's cadence consumer second still going increase, a the early forward? international you we this markets in reaction/churn increases related think initial price How the about U.S. in should rolling you the about can talk out, year? of do year? And expect raises more across price

series plans. a of Look, don't forward-looking a talk of great sort questions about There's Yes. as our principle, we here. general ever

price what think I what major X we're where we've very and to now. by taken we that in say we'd seeing last months. XX can the That's here the is say basically what X encouraged like we're times in about markets

And see great so think point of possible kind be what I in a of might for the we sort territories. our data that rest of as

days. here. basically But early only expected. as of I for is -- expect think see monitoring sort so rates right to that that's And one and than what taken we're you time But cancellation going here, would by to goes the on this all we're we're still which being that better the action this We've quite of continue it's encouraged just signals obviously now, would closely. monitoring obviously

this on you opportunities. Day XXXX value. how growth Patterson on Okay. is time another Spotify future lifetime from outlined question Daniel, at We've the back focused got Investor Justin

influence areas you emerging both how growth and music Audiobooks where value expands future and education? core margin and gross like for increases, in As the invest does this lifetime business

Yes.

and Spotify. It too, keep we're LTV nice Star all-encompassing we it is for. when or ARPU, we like is where bunch lifetime North other in obsessed measures is an it the that it so And pretty you're of that optimizing metric retention. of why across way measures so from that things, much a right fact thing everything course, a from, a different operating value it business everything why You're like about the

we're overall, problems on can the solving most thing intersection probably impactful where and focused between So focused on I consumers. we're state is the creators around in

to is that what list, our If easiest understand the you are look want it things to priority way a makes win-win. for on to

be be thing look base to too. for So and we them what we on a for the existing adding a something is where that then them, our our look for creators we win at look list and thing when of of a consumers priority win-win highest would group where at would them

of work example be will right concerts. great on the now point a we're So this probably doing

So consumers Meanwhile, lot that on shows is problems source music consumer early and know But concerts a big that go to for we to don't of days always the of the But going a when. side, very know to big side. and revenue artists. also live it's is for they very what concerts. one love

their loyal where to And surfaces artist, that Spotify create their the and thereby so effort shows. probably different early also fans the for artist on us across go opportunities of listening because could having on of great concerts make this and an real at fans their to base pages thought we to we that could very we artist promote have

And across support support And we're this that we and of we've base artist that. that we're Spotify. seeing seeing quite call widely something First is on great been program the great Fans consumer expanding that

things creates examples want into idea already existing we and that ways we've that. for in expand education create potentially value So when will higher well, that that of in course, believe LTV as verticals creators new like win-wins. where, way in are gives other have concerts, finding by something of Audiobooks the great value. of groups invested the to is But you both other and and we see things overall, creators of do an we We we then more creating

right. All

growth this the come pricing laid impact is and Doug half and There to the ARPU bundling, XX%-plus into as balance many increases price to next through ARPU. the of X question How revenue right years What to will goal Anmuth pieces XXXX? Day? moving over is across growth next rate out from achieve currency-neutral second are a on of Our plan optimizations. the the or going X at as a year Investor volume and tier

Thanks, inputs I might the here revenue of are of once we think on out continued think, all, all of kind highlighted that variables in the actually are kind factor you most like of you've But which think plan list a equation. also really other of here growth basically and about sort the offerings I actually engagement Premium subscription all highlight leading right here. leads I perhaps because and seeing sort terms is what you're that, our because not is that, this Doug. Look, bunch I seeing think of in that called -- levers that's our the across on important think indicator the real of I flexibility to

next into I'm the think say I there's the kind different magic years, necessarily formula of going in that X at of a not necessarily for it's leaning to way but that time. points be pave different going things going across to equation parts these to are this

the I now portfolio about that think and important gives us flexibility we're a part optionality of the talking and here. is sort portfolio

right. All

be should more on additional cost determine ultra-premium how getting you in coming help going you Premium this Our tier Premium consumer and an add-ons. next an would tier. your new offering? to that or from be $X come increasing noise Rich current us would features been Can understand what what There's question is that above the Greenfield is

Rich. Sure, Yes.

worth paid think I it's now we're subscribers. off, million noting first at that So XXX

huge a one planet. services that the proposition we're one-size-fits-all part largest were of a of the proposition. very So simple on of enough, driven And success by interestingly subscription really

or subscription doing the to Spotify. because where more Duo X all the I in one-size-fits why plans. of part a that from moved better for many more consumers tiers now is last tailored to plans options everything have been to There's to we've from just But you subscribe Student basic Family to year business to has believe the proposition much

And of and even huge good music looking is group Spotify primarily use on XXX in see Spotify. of that more do lovers the flexibility much they of who we that music what a exist there's subscribers now are better subset for are Spotify. want And version million a that capabilities how that those

And commitment and of so about growing music ecosystem. relationship entirety to sort the that the our music to of talked I industry the

both for so And where this also think we the consumers think creative win-win create I great for way as well. but I a ecosystem, can is a

plan to offer much of So Spotify. a better the here is version

So think $X current that like tier something could above like include. be you something premium the

Spotify has, but it's of other So or probably board that I'm talk to benefits ready of all deluxe about across has a not the $XX higher version around of that a the Spotify price lot the that $XX some more point, a quality sort normal version just things but lot control, and yet.

do the now think it, enhance of But net million also the large really are further consumers it and will seeing. want the there's positive believe industry that reason XXX the a for of is entirety will that that asking music industry music that subset but it's we why a to it we subscribers is be us growth we're and doing is which where began, something I very

about it's quite we're days. it, So excited early but

for time more got We've a right. couple All questions.

Black Our next Benjamin going to goals. from on gross is one margin come

So no good unpunished. deed goes

the hit forward? milestone margin was broke about gross specifically were You ahead you your XXXX that this hit, postmortem, targets If at us should what do a think we the we plan. margins And Day way? to going gross in of how now gave well Investor

guys can move have away straight how the Ben I you we love in. maybe and on honest. when it take I'll chime accomplished to next something keeps are Yes, us thing. It

sort postmortem. if do happened, I Joke a of yes, aside, what

I is business. primary a think focused as the thing really we

this but say on monetization has me our heard of this, side. a You been year

up company. more line, we've become in to a -- stepped ability the But bottom resourceful on on things of a also, we've our efforts course, monetization. as our of lot done So

growth function of growth mind business a not really transformed all it. at same the at expectations our on of of we've on time in profitability to the just even those one it's intensity and sort fast that's with two the So kind things focused but really how to with have own costs, exceeded that

bit way I think to have probably about is the us than as I ability first getting as gross better long of is well. Day then think that don't that back actually what And margin but and Investor about any hear targets, a you said to talking at of XX% to we little course, the term, sort well. go to new higher

would team. top said back is to to much that So we of what Day, encourage Investor just very I you mind and still the myself go at for

point to add about say. for And the margin press And actually been a Daniel's corner expansion. every ability of on resulted right? I'd sort It's of gross find company, multiple here what that's of engines Yes. truly to is court to from in our full focus, kind

I've service delivery. and at our sounded payment this improvements talking with profitability traffic a areas kind broken in are things in of fees partners. point, and our how and music path. It's There sort payment podcast probably efficiency of It's Marketplace about but like smaller optimizing we're record streaming like cloud growth. the like even

mindset to continue forward, of of. goals. gross of different we take I things of going long-term margin village that to it's story And and up be a very think to these proud sort to up sort going contribute ladder that same All a where going it's to our are laddering sort

All right.

on responded how relative and the opted you Our on any recent difference plan basic our Premium how adjustments. many price the for next have seen have detail Premium How the increases? share to Morris market? from many to question have you by retained how service? Have pricing subscribers plan Michael many Can have is churned

Michael. Thanks, Yes.

kind to time I we've price uniqueness highlighting think second pricing, us have days. it's respect of right? markets with months. still the such major is all early for As this, the XX of X I Again, Again, this said in all raised before

so of And all a watching we're kind here. like hawk metrics

of obviously, successive And But suggest sort of gives cancellation that now here. the early better-than-expected days new the a now encouraging. portfolio of basic that are us despite pathway that kind rates having We're a moment signals mitigate to seeing price churn. kind taken like in we've it's fact

very encouraged by are call have. signals on here, all share We specific that we the don't right we to have numbers this but

Morris What with of still question All is cost How And the to the And right. cost Michael your time business on Investor structure? goal follow-up recognition? going does from relative And basis right margin our is to frame the today the reach a your on for gross revenue Audiobooks that does What come impact Audiobook Audiobooks. is margin? the to Day what's like XX%? target? current look last that

question I'll Great things. two Yes. share here.

variable let's about in of cost first, think consumption-based general, following I Audiobooks, talk a structure. sort

think continuously business. about important that's mind think to you kind I keep thing in that as here an of

how in respect before sort into at to again, further learning still lines. start optimize, Spotify, second, detail with margins content Investor sort Day but We're still. good profits. investment longer we term early that on ourselves, don't have sort And we'll very what with we establishing margin laid time the days business. the feel out of that today scheme terms getting to or on of vertical for focus the really you the We of in for share goals And to mechanics we it's of and always new this and of about

to audiobooks of business contributor feel the us near Audiobooks What we're other I important about continue how this driving health engagement would that encourage monetization. a engagement makes content to the the we're internally. for platform, happening that path thing on how way any are to to here. our in think the for this is about all making really paves seeing central sure just accretive about that way The in most as or you the a term think vertical we is incremental think more It's and we good about being

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