Spotify Technology (SPOT) 6 Feb 242023 Q4 Earnings call transcript

Company Profile

Participants

Bryan Goldberg	executive
Daniel Ek	executive
Paul Vogel	executive

Call transcript

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Operator

Good morning, and welcome to Spotify's Fourth Quarter 2023 Earnings Call and Webcast. [Operator Instructions] As a reminder, this conference call is being recorded.

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

Bryan Goldberg

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

using Joining be VP questions. participants and from today to with new Slido, afterwards, CFO; and us And CFO. we'll and will who the code Paul. and Vogel, relevant. CEO; Analysis, with search Ben our transition slido.com, can Paul going We'll questions submitted by and vote to can your while Kung, be Analysts most for the been be Questions answer into start Daniel s-l-i-d-o.com find our has of ask we can Planning Daniel Financial the #SpotifyEarningsQXXX. assisting Ek, our directly our the they comments on happy opening questions then all

have reason, your add we'll access Slido, some ir@spotify.com, Relations you in Investor for you can at to e-mail If and question. don't

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

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

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

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

Daniel Ek

to a year of was hope us. and everyone, deck what an to All Spotify. you've get and thanks sense right. hey, shareholder Bryan, had for opportunity the our joining I review XXXX incredible for Thanks,

adds history. our This Throughout the net experience really of year the on annual by in our a side our also the toppled backdrop and year the engagement numerous in of year, MAU notched and milestones the XXX And previous and records. significant XXXX uncertainty premium XX biggest was accomplished the some full of million, this additions continuation levels net set million numbers included own adds both and and we surpassing We exceeding we story. of campaign. first XX turmoil expectations entered QX when against the all hours global of of Wrapped just the significantly

achieve has to also also the had pleased in while these we're an steps, And Spotify, we year I'm level more building XXXX, track where but prove growth very for And different to to that our there's a operate in even with put not of A we true is our we company question confident by saw a being a decisions a it year I'm we're us super started heading. where perhaps product, goal how marked is that consistently we of profitable on gratifying no company. make one that is in company to what a difficult that business. evolution some just but that great amazing taking

to of which turn in efficiency, but continuation in profitability. you a expect development, what XXXX, drives should you XXXX, to strong and which strong increased looking an product leads monetization on So saw focus with growth,

so. is to you Therefore, creators deliver. intersection the that wonder profitability. is sacrificing the value at between to believe solving do some I most . thing the And real consumers there scale, be With even know of start in more Long for we we growth still and may Spotify term, important if growth opportunities problems can will we're of

investment for that However, is equally has true our rate hurdle increased.

per new to before, growing shared with price growth. increasing revenue times our users, new increases. various These have I've pull revenue we different levers creating as include revenue businesses through Well, at to user streams gifts? what and So drive

In XXXX, this shift and should throughout always to be at case, you forth the back see year but expect all leveraged times, we won't key revenue the a ahead, among three various by XXXX prioritizing believe variety another elements solid going an to of progress be based led considerations. of I acceleration year growth. is three these And on looking a of

focusing perspective. of it's monetization think remind of few it's years said, the those is funnel some spend has I the users. That of top on some top The the of it extraordinary that we modulate our years, the we And to most in between focusing about important constantly investors driving growing what years, In last been from time funnel. on.

XXXX trend, this continue to growth. that in on is how but focus more our aim is Our we monetize

provider also well, and quick the performing our the into the days, business, shows It's overall about books excited became to extremely is from given #X that a accelerated still on provide update we this market listeners growth. audio early which but notable players of from potential. entry wanted I is which industry behind very books how feedback encouraging. audio its we Data Audible, the has and is are are. our In QX, entrenched legacy dramatically its

to out More exactly publishing for this pie takes and markets. this of set through audio the in roll come grow And is additional new and industry to what we to entirely do: set it expand hold listeners. we the an books out the interest as

it this to line wish the and I over numbers, details thank to more all to you provide with the turn opportunity Before on him well. on to him I wanted of also Paul take

position to that we sticking and is will be solidify months, today. great around a this the more his couple He's in call. strength sit Paul Although the earnings partner last a of for helped been

these years. So Paul, for you, thank

on also search. give our CFO wanted you quick to I a update

with the of We caliber underway, that candidates I'm happy well seeing. and are I'm the

and that the confident this to someone are enter both find business, building resourcefulness and on will we our As is product driving long-term focusing person, a next about phase levels great the of critical having efficiency I'm passionate a we right great who of success.

you. to again, and Paul, thanks over

Paul Vogel

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

very million to our a net Both trend billion X.X above grew the million. added XXX QX XX grew million, XXX strong quarter. is MAU at continued and we to subscriber and subscribers to outperformed forecast. quarter. like EUR be finishing and million historical year-over-year MAU growth XX XX% Revenue during

as of of the due basis an effects XX% new the XXX ongoing result prior Excluding to effects a representing subscription grew of unfavorable movements, versus year-on-year, currency revenue points quarter the the acceleration pricing.

and podcast an EUR operating favorability of by costs. guidance spend mainly XX due which guidance XX.X% was Turning loss We above related to better XX due to in basis business. million, Gross reported of and our gross about points was margin marketing primarily margin. than lower-than-expected personnel to

As loss impacted announced in about December. we we was million operating our previously XXX charges of by actions efficiency EUR related the disclosed, to

adjusted its sustainable charges, XX million of early more profit, inflection double business stage generated we of quarter the is Excluding growth EUR and than profitability. towards onetime third operating the the which continued as

Finally, was flow QX. Free EUR cash positive XXX in million

related, business, chapter of potential. some entered While generation we the business's timing the the of a strength new remain confident cash expanding in terms we've that was

forecasting million XX% forecasting plus X.X a are We're rate total EUR XX QX to guidance, million million ahead an putting of revenue we XXX an billion over increase Looking currency-neutral growth from subscribers, first also million year-on-year X increase XXX and quarter the to MAU, in of of QX. revenue.

anticipate We profit EUR million. of XX.X% margin of and a operating also gross XXX an

growth to average no growth we do well. as guidance, the that expect be we should While subscriber year year of XXXX longer close few full and last user give we years, healthy strong full expect the

Gross gross year. improve year margin profit expansion for to the operating throughout margin are meaningful expected positive both year and to full to deliver expected podcasting with the deliver

also meaningfully exceed free to cash XXXX. flow our We we in generated what expect generation

and a is over of my Bryan Kung, as who and us past also the for like years the colleagues all been additionally, thank And partner Spotify Finance, joining special. I'd has for my Ben at finally, call truly on And X time Daniel Q&A. trusted mentioned, of to we're making [indiscernible]

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

Bryan Goldberg

be right. how preference the queue vote questions. Thanks, people if to they for any appear to order Again, We're Paul. the #SpotifyEarningsQXXX. All please the their in going got respect with in reading questions, go up to you've slido.com, questions

Bryan Goldberg

come And Anmuth question from do to And yet? inflection profit think on gross is positive content into our here rationalizing going Doug how as about today flipped you're podcasting. first 'XX Have you podcasts through spending?

Daniel Ek

Yes, Doug. I'll Yes. this take one,

then, QX, Investor which was to than breakeven achieve business, the our And to drag XXXX, adder to target up just lot set close were when we we committed had So our everyone and to probably as to very full what business podcast year, everyone, a podcasting. on gives pleased we that me a something as the that a was in was being net the ended to I'm we business, business that year music Day around. will into were we I thought obviously, we think probably margins and to last I confidence with get podcasting the of but profitability outlined be turn think worse they say on level expecting

happen? are Well, what that for you two And to about so think it's drivers the really when then, drivers.

we of then hours, lot And and still on close more podcasting deals in the XXXX, top you're of lead deals engagement us then and we top that doubled that that with the the will down healthy now to XXXX. line, growth have And to opportunities the got means result be seeing didn't seeing the we're really throughout breakeven there a in for on have gotten and the positive a line. worked, the line to business engagement That will that's -- out work. those On side, bottom turns engagements. monetize on that's

Bryan Goldberg

right. All

margin from question XX% will next each? margins. you impact gross XXXX from on margin the in you impactful are can Our that towards share levers XX%? help to more your going long-term of is music Morris you the goal the relative What steps gross And detail come anticipate most to and on progress Michael

Unknown Executive

Great question, Michael.

marketplace music of we made continue on already driving to the that of date to of see the in label and area. a our of In we've in focus the as progress to sort those partners adding building progress margin we terms and potential goals, adoption upon growth the value of lot on therefore, that our products

marketplace We in streaming to important parts the think revenue cloud story It's all leverage and mentioned, cost as areas to the on respect also comment key with called the It's think, these the terms out journey parts. In story continuation XXXX, Really, XXXX, you've of the X into QX. of think our of sort of other such continuation podcasting. on broken growth, and efficiency and just equal can delivery. your in are and gaining be of greater a profitability some I of levers cost three I as I of XXXX.

so looking And on progress to building we're there. forward that

Bryan Goldberg

We've you than not still revenues. revenue. a your now Greenfield got see plus advertising. Rich question overall it advertising growing With on I'm subscription accelerate your of of How surprised faster do from your Okay. XX% of XX% it's revenues growth goals revenues? becoming advertising to reach under to

Paul Vogel

of here. a things say couple I'd Yes,

we're first, overall. the a advertising market is how very we side, advertising but think So strong the be growing. to of high-teens continues choppy, I think pleased lot really the to industry really on is our strong -- relative FX-neutral ways and Obviously, with growth

feel we That's the one. of advertising good So number about growth. kind

faster we've obviously price seen in general, increase. we've it is growth side, is, a the subscribers plus had X subscriber Number on on

would even the have both when factor price overall we others subscriber so the growth faster in side And probably been the the than thought would maybe and growth thought just premium has you outside have on increase. and

I'd And business. the you the than last does just advertising get business FX the also more remind impacted by premium significantly of thing

businesses thinking you're about But has of on of when about the an progression. sides I numbers, think feel now. also so both really And that the impact we reported just sort good right

planned. as progressing is everything So

Bryan Goldberg

impact Rogan Call All got think nonexclusive? podcasting. exclusive or to follow-up Her Greenfield How a Daddy from should shifting podcast Rich opportunity about Joe and on right. gross like the revenue of we We've margin an from

Daniel Ek

Rich. Yes,

people. So of about I remind talk generally to level kind it and think up and

licensed in don't. of many exclusive into referencing made but you're too. of all-out walked time, exclusives at that mostly nonexclusive reference sort we an many shows, I own with approach Netflix. did effort we're to was going what original deals, said actually at we this more to podcasting, some of and we exclusive we when that to different much it to similar a try We things. strategy and once. for programming, others, and And we also did So multiple people did went strategies we But that And the also opportunity our think we matters said thinking to, for some take an the

all line that, opportunity not just the you what positive the the So net as candid is to we've the side, exclusivities be that general on on on as story, of see were seen I here while think that side. with the we it's much driving ad is

think distribution, creator. be be And and we different goals. different among of the are to have on broadening going The many we an can so them, a obviously wants by platforms of audience big Most accomplish we with as more aligned as creator to wants to notable possible. number

important. that's So

the the that in equally about on why equally is revenue with with early XXXX really structuring because advertising, been care the about creators. with of excited aligned about then we care we new Spotify. that is, been what story consumers, And the second we've And we're term, started think I growth We creator. you seeing part and when become types deals reason these long we've very

feel So for strong that growth we're like itself the excited position trade such And the creator feel opportunity because we I can strategy. not actually strategy, one the creators us, the even a aligned other. to with I bring new about because with advertising asking and really this I'm Spotify in to is with creator both for we're better the

Bryan Goldberg

Okay.

Zach Marketplace. And provide Can think next question momentum from on should and on performed comes how in an 'XX? Morrissey we that update Our about marketplace how XXXX? into you

Paul Vogel

growth rates well XXXX. profit to the rate, in Marketplace to contribution gross similar Yes. performed at The grew really 'XX. basically

a strong the again, in of along gross XXXX, to about 'XX. flip of margin what improvements be And costs the overall prior really then and to just other about margin, with the gross when Ben reiterate you key So growth some think said podcasting revenue. and marketplace contributor, moving will

Bryan Goldberg

from Zach. a Okay. We've follow-up got

marketing thinking And in further You about saw efficiencies? strong leverage how see growth marketing in spend you XXXX, you and subscriber for XXXX? room do are more

Daniel Ek

positively is that top everyone, to just we continuing reality about sort XXXX. seeing efficiencies still I I that And seeing we're as so about, growth. XXXX, And was talked much the has of we And of call a earnings and feel far for of go. Yes. know the some surprised I healthy trend been will in the efficiencies were something believe, good don't line how during reminder this the I is is QX where far.

things intra-quarter, always but may is concern big The term, are see long when some you're you responses healthy making the positive then these you impacting brand.

-- going debating pure far think always been so we're I So but I to but modulate is towards great that. just been still some, we're there's still how question efficiencies quite the But what And internally, still expect has seeing and we've ones. much?

as most I for us, is growth said, The thing company. long-term the for still important

you're optimize will modulate we And going what I that's us to think the So between quarters. for. see

a spend may less. we some quarters more Some little bit on

It and some had XXXX going for you, before. our this the SAC. to in to referenced all the in of metric been efficiency spend. is most down, important The of LTV think We about though, XXXX

to hurdle Now going rates. a higher you're see

going we're we be to wouldn't quarter lot investments diligent a more thinking And be as approach But about more LTV should that's think you about and spending overall. marketing a you So But these we're to it the per opportunistic, the take. you? such. why SAC, may if see strong as

Bryan Goldberg

Okay.

Eric priorities. from come is to question Sheridan next Our going on operating

balancing quarter an pathway long-term margin basis? to your growth updated optimizing efficiency in investments, the next restructuring, annualized Following And/or what's internal years? targets view long-term the fourth your few about accelerating on

Daniel Ek

want Paul that. then in you Ben, chime Yes, I'll start to and or if on

as a my I a but top efficiency better the we're about for really doing is early becoming all for it thinking I expect way the I one to about company, consistently in quarter-by-quarter. it time are mean, started where us remarks, I think new in And introductory talked XXXX, operate We it line. and we same should XXXX. think gradually much investors Yes.

with the have. that at look new more being we just we going That's to operandi have. modus continuously are resourceful We the resources

growth? of answer we what the But we're leads we then, and And going for still because concern to scale. with problems That's a about to at at okay, be, said, that believe obviously all should expense alike well, not the care doing and consumers of that sacrifice to not. course, that be long-term do. We meaningful where we to able to solve want growth creators real that's are

So that's focus. our real

a going growth, us it's all constant quarter-by-quarter cost funnel. growth, see And parts what than at of But optimizing balancing think at growth, I that act. sort of us you're seeing to growth you're or various rather

it's growth, it's bottom line. sometimes line Sometimes top

is growth in a an the may of about as trend. we of it monetizing just others, line growth. in be MAU just But line and XXXX example. that healthy we general That's some As various top in see the XXXX. trend, ARPU general goal growth had more you'll have may more as top geographies, a approach

Paul Vogel

Yes. I flow of everything so optionality in it of flow I better would the to Daniel what the the add, said, forward. gives and if you cash just about cash the more and free it profitability, free do terms just can much acceleration business think moving think

us year. side, think free so basis, for of sort And the row profitable inflection forecast seen with the I two that a quarters now for cash an QX you've in flow on you've of adjusted next seen again on

makes so just the the for much have sense areas business the term. all for And in to that invest to really the in team puts optionality long place a better that

Bryan Goldberg

Okay.

you on the about state come market? going is audio surprises to Greenfield the question current of from book Rich next audio Our books. most What

Daniel Ek

think I parts two of focus. it's Rich, Yes,

books. a bring So whole side, on our is are audience I to new we part audio to able think intriguing the

of that not normal consumers. traditionally So the on pleasing that's and think is do we're that been to that titles audio well books, has that whole These audience biggest does internally the resonate externally, format, surprise means which because titles new bringing the well, with type to see. a I see the and to Spotify, great are

then think the are see and on innovation publisher I'm happy sides I and have just the things. And among a there. I industry the innovate to bringing overall, we that very about so that side And is is just think, great see to that's very the author to partners to to open-minded the we're there And it's new important, partners this our willingness hunger of and trying all world. excited an

that's how books is see And it's our positive to audio adding definitely base. also much surprise. a amazing value So to been subscriber

So that. I feel really about good

Bryan Goldberg

Okay.

margins. Next on question gross And Benjamin those should of you XXXX. XXXX if so, the XXXX? we still is margins Black should the trajectory from Last how margin be thinking about quarter, case? throughout gross mentioned of Is exceed that

Unknown Executive

going Thanks, we mentioned margins. commentary, some potential kind of gross my ahead excited I of this for building XXXX have the of about year. us Benjamin. earlier the that Building into on I think you we And blocks very feel which gross mentioned about we building continue have going and executing on sequential previously. that that that against expect it's of margin, should I we're blocks growth building did focusing in we what those opportunity to is that in XXXX,

Bryan Goldberg

Okay.

partners? a question from the What pulled how Jessica this at if the are next your just business. your recorded to Our all, from competitive their from implications does TikTok. music on Universal Ehrlich Music going music to with music negotiations come is standpoint? impact, And Spotify Reif Group

Daniel Ek

good honest. our to But whatever, best about of I'm any with been. Yes. sort at I we I feel comment better, relationship been the really to music what competitive it's partners. know, be our It's on it's Obviously, say can don't going dynamic. is probably not

And creates being but implication, And enhance feel to much partnership we're are where don't We of value music yes, other we great dynamic great with So to feel about think I music feel that's any good think that any it I partnership. we that, has competitive partners. about recognized. the our an bringing to opportunities the extent opportunities. feel widely the good I the industry. I about really about

overall excited. yes, we're very So

Bryan Goldberg

right. All

about the listening? driving question momentum? of XX audio do expanded the to next you talk of seeing from the Our any type in extent what books. books To purchases the is markets? is with seen what you've value audio audio books relevant Ripps hours And subscriber Could you engagement proposition think you Maria are free any of uplift

Daniel Ek

Yes, Maria.

Maybe type well very So It's I lot I the surprised our safer eating model pleasing well positively younger of do is consumers not totally the where my doesn't the well without response, entertainment. some traditionally mentioned you that market, very but authors lot which that book titles as engaging very up titles many newer mix. about has been a surprising. a also kind strong, a bets. It's engagement as a are you driving in content the with of the culture. given can chance of sort prior It credit, authors, as what take but is of book the that very in of towards on drove more new about think

seeing we're additive very, and around entire a really great So believe, consumption, is very of industry, I which interesting which amazing. the is trend book to sort content the

expensive that an how knows it we've speaking lot but platform, as an course is audio early a proposition the our then the say we into relates our to of I audio think is it's too business, that costs on have buying and of where value better engagement generally books the books more to is what everyone Now seen money. translates today

we're that term great that we us value another course, our to as reason offering the that that, it's us to by in to long follow gives the to our then an consumers. well why price allows a ability consumers. of value reflecting through And So have increase

Bryan Goldberg

Okay.

Investors your app Next question confidence users. now revenue potential. on from operating have resonating the in and Justin margin potential with is redesigned Patterson

investors XX% your give outlined your confidence at Day? should revenue look growth, Investor in targets the achieving you As ahead, what

Daniel Ek

chime then can with one, this Ben, in. start and I'll maybe you

which and year, the much that line that again, this bottom but much expectations off on the efficiencies sub And when that has is XXXX. and XXXX. translated then side, of expectations exceeded continuation pretty on MAU a top dynamic. line increases, set the we'll our the trend trend XXXX, growth of all price really line been very and all into that very focus a a exceeding healthy was And with So all to of year of to top on of side we the level that thinking then walked of the we on leads our have I just continuation in growth you think, again, that healthy into top

So I've say later into but then before, said that growth this that bottom or conversion line. I'll or or translate MAU later later again, into sooner subscriber sooner translates it to then sooner translate into revenue growth then

given so on about year. revenue about We will throughout that we're And really a year on growth smaller of and that Ben ability you also, all as the XXXX XXXX, really that side on, confidence mentioned, having have our give podcasting focus other with should about the I XXXX, cost had we throughout because on to feel side. structures healthy cloud employee we that it good efficiency be talked the focusing the with talked great that the costs, we've it but things been this

don't if have Ben? addition, any know I you

Unknown Executive

that on well making sort at is grow perspective focus from subscription that focusing of about Yes. looks ad both to user business very The monetizing sort premium the forward. and continues perspective funnel And as much side as I kind sure a -- the think our of clip commentary healthy very is No, that, of our strong. all going top the subside forward. think I going a

sort progressing XX% towards the really feel targets. of about we strong So

Bryan Goldberg

Okay.

come is going to Kannan on question from next product. Venkateshwar Our

used bigger models considered part Given of the the pricing framework algorithm. is Have growth today? All-You-Can-Eat beyond the a you

Daniel Ek

the is single the from It's actually fact, have easy today. in In that far we It's think for already Spotify proposition everyone to some do throughout a pricing world. world. other mechanics

for we're we people from a have weekly scratch cards Spotify one even top have physical So certain listening. passes, basis their We order product in that passes. that to gift on up it's markets, cards just instance, a day in offering week

should that And continue our want. favor that's do. we you are very consumers So of models much something to pricing expect what us adapting to in

top-up instance, we like of things that to with things of is Now a like, course, because the superfan app. able purchases, things, hindrance little cuts for to exceeds even be things are many bit, insists a take inside about which for we're said, Spotify's taking Apple in audio touch meaningful why is books, one things the case quite Apple XX% carte of today our cut, own la talking many revenues a that purchasing of could like that the significant a on cases,

So some in iOS that some to limits we innovative would to currently are of the more things more would innovative like that we things ecosystem, of that on these do, which doing restricted we like do.

could that, So all world, would consumers yes, We Apple in be from because doing do a stance. way But which these like in it for good it. and territories. profitable certainly of in even are where of of markets are and it being very other the heavily we all, to doing -- precluded already do we at influenced, to many more iOS Western which creators

Bryan Goldberg

Act. into question Michael a Morris' on That's Markets segue right. All good Digital the

be also financially? your with may Apple's the to you And You vision? DMA proposed your way positives Do dissatisfaction posted twice the if so, be and what how new in supports the about business do functions available? to that the your company they changes. to impact the expect implemented then potential you about DMA And with expect a

Daniel Ek

forest is very truth do the allowing obviously Apple then depends response us DMA. which know very incongruent to be we to But yet. compliant how in subsequently their much much obviously, stance, stance think -- I And that on is the with outline we Apple don't then so. our Michael, we with complying would The stance responded our that's to with attractive bit on to experience such pretty of a the everything of they're because same surface, surface they're much developer want this the the behind think the on a it and but any it's an with make terms. matter I pick it doing frankly, looks no that new

for news, Spotify. the about some with that's there or know I initially not and this whether the from I a the good Now investor guess, downside questions would standpoint, I that think case. don't be

have the to quite currently terms old are we're we the that as future So going But keep significant. be going. on still could be there and ability upsides

bit talked with clubs, these that if we took be we simply We because Spotify fan that would terms. means these that new it all doing of things about probably a all could from other do would be barred it unprofitable little for we creators

but not we what be consumers of to for downside, do, do fact, in quite alike. wanted just but lot creators were a going able upside no and So to there if, be for we will to Spotify,

as a play will come in March last just reminder, And law into X. this

hope So allow be and will will creators alike. consumers the European the happen and ecosystem, this very it because take for action obviously, for that greater my to is much far still both Commission

Bryan Goldberg

Okay.

comes from should about Levi Batya impact audio consumption the think question How cost audio of books on we margins? on next Our books.

Paul Vogel

Batya. Thanks, Yes.

books, we about that. like which nice length you components individual has will at say investing as So What call. Ben see XXXX, already know, break don't really is talked through audio margin on still I we out while the in the in we're gross a improvement

We've margin years. can have over And at audio of next the the books a Investor business where model audio believe It's audio we talked the so be we gross -- couple for books of the Day feel to. progression very going additive. long-term to like we and books get about of the

progression that see we're continue we're very throughout encouraged that. really margin still so And gross to optimistic XXXX. going in about you're And to general,

Bryan Goldberg

business. Kannan, we major payouts markets growth XXXX? another international to in We've ones Okay. see flip from any impact minimum on music helped got in fixed And could Has variable payouts? time some the this question from

Unknown Executive

it's markets, minimum subscription to the begin grow to basically them -- we ultimately these in driving sort in us up side subscriber as of this. well, of light sure these building advertising help these story Great to and start question, how clear growth sort It's also user I Kannan. in both upon then of about say The sort payouts. base international of and but there's markets in been and which hurdles is of a answer question that fixed steady markets revenues making that version the of the these engines would two short the to progress yes. this really in kind short monetize we

the progress think department. one ever is constant story in this I So of

Bryan Goldberg

another major renewals resolved, question for most priorities XXXX? on what key Okay. your With Anmuth the Doug are business content We've podcast podcasting. got from podcast in

Daniel Ek

the a we've continuation with obviously, podcasting XXXX, of said, business from Yes. as kind you of the one structure a throughout to XXXX done. mostly Much more transitioned that's of structure exception, different

Now it's and innovation again. growth back to

excited there post most are is to with things enables asking that to have do are more audience. engaging them their us easier I'm of that ways about creators content, lots of What

and 'XX You've seen already ]. 'XX [ in some of this

saw you healthy podcasting growing the on reminder, a in platform. a As way video

which You've seen us responses, that is showing phenomenal the quite Q&A on up Spotify. add to see comments are

are those more Now more more beginning. starting use just and creators to but the you've interactivity much seen and tools, that's

more which podcasting, plans plenty think also We have of means will platform, content engagement. I which I on mean the on more think

a now a really And growing is where lot in think a it for And are credit of to all out. it's we to losing than we and profitability That's us. today standpoint podcasting most for. But about profitable that's lot so on money it. XXXX. been we're not need prove. has we of focused doing I it larger think But So give of story a increasing people instead going that's from play where medium really one a

Bryan Goldberg

engagement. talked got in which overall usage day AIML it your case list interest the Greenfield on day user and a my is you've feels use Tuesday for another impacting like list, is Tailspin to [ drive [ about We've user Okay. creation day Sad way, [ How ] today Hack by ]. And spent? Daniel, Rich ] question engagement. time from

Daniel Ek

they these today do this, of of this All they cool want But their is identity hopefully, is is on I and up to yes, aside, a to inside any jokes story narrow personalize we're people. own this wonderful wonderful weird and just crazy that to reacting reason basis. so these which which for in for you what it way, they spin in tail they bring surprising. engineers test through very Well, doing. wonderful gives company on sad that innovation very this dreams but and mean itself be is keeps to turns again, What's finding out ways able weird do music, culture. call something people And that at culture we've consumers and humanity It's and the express things, out nothing right. And and weird they are and culture core Spotify. cases, and like kind thing that. not And seems a we scientists been to team seeing it have a the use is of

by on think searches this, saw increased I referenced but X,XXX% day a list. And I we over

the to on reflecting people me types a keep And later to department see are content. they're creating it, the really It's we of things every side, things yes, and after it's out. if into side the -- our of I'm of side whatever this well. thinks it things feature doing that out surprise team your app on innovative we excited day of current on of also these now but more of the the way in podcasting mood churning book So kind on that today. is and come find both many music Spotify and And as wouldn't sought widely come the course, audio out of proud

Bryan Goldberg

Okay.

from What learnings come to going more as growth? of Benjamin headcount seen efficiency. what's some Black is question on are the next structure? key your philosophy cost you've Our ahead, the look with And streamlined we on

Daniel Ek

will of work anyway cases, this out it of go a kind value. And working. reenergize through actually sudden, on surprising not thing things to sort probably so to everything that happens, Yes. Initially, tend things says, go that are and is and you all even turns even that in we exercise, exercise, the drive people when right? things true a healthy that sometimes many through then it of lots things. really killing most can things always I you stop well, the the cut when key can't this -- It's of an as mean what because everyone is refocus works

of lessons, have of on obvious So the those calls before are these heard you think which plenty I before. guys some times

I a more company. things are the as midst we're the things think learning the this exciting of in

think, we're well But something So it way that I I adapted memo is, is things then this of as means notion internal is being fully wrote in mindset. by this to published resourceful. relentlessly this my no we

For how yet. most there, of we don't constantly case. highest me, the impact about resources And think we're to about I to reallocate think getting that more are we but think the means constantly them, doing use everything having and and just we're about not thinking

I for is good ways go the that to So is think there news on still some us it.

it we And the are all think not company you're you than it. to but allergic I that the has way. We're diligent grow I things going been to obviously of that grow sort going growth should in pretty We much and should ever anything. think may future. rate new see in across importantly, things be us shutting down think see the forward way about saying, more well headcount but as type big higher work for going into have any not perhaps can of you're more a worked And not to working, the never hey, is, we're hurdle what investments that will

have on. company dire and a give sometimes about, this achieve virtual maybe partnering they're where And are up. and is of thinking ways that I I to interpreted we We're and doing X, Maybe the just equal media this? to outside biggest the for if the X us do party. Maybe takeaway mean there investor, straits that try there to is better think big XXx box. audience us X, doesn't it X it to in ways any party showing have get brands lavish no because that for danger more. not not the up by about throw event so that and with That's doesn't to they're the you, plus to a efficiency any something think X in show could the case. to is better simply it kind can of or way other equals conjunction but Maybe come Are in and longer is where

learn, to a that think, do but So to things about the have I still we need you're see lot we re-question going think have to but going forward. past us, in them how worked,

Bryan Goldberg

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

Steven Our come one is going next Cahall on to margins. from

of the margin implied XXXX? can the is assume in margins the quarter improving guidance? there Are for First strong seasonality quarter year. QX any margin lower same sequentially of typically benefits we Or onetime the

Paul Vogel

Thanks, Steven.

there. themes question you the right I your in think have of sort

areas I our between driving said, think Daniel we efficiency had growing of of lot subs, XXXX, focus of and to and to as monetization a in sort users reiterate, sort increases price new taken our think step. actions, think, I of core shining stair all sort core through. these QX to business is has where is new a And sort I business, of that

think that before, building I so to starting into focus you And as go. a sequentially on XXXX. can I margin where to like our the point, I new quarter-on-quarter sort And is implies of think, said continue expect that for

in progress forward that department. look to making we So

Bryan Goldberg

Okay. in about execution initiatives recent We've following do organization you How got reduction? question mitigate the new risk message headcount execution. from to XXXX? growth Richard on the your What's the Kramer

Daniel Ek

Yes.

in one implied means. you do focus and the you do think my the how relentlessly your do do to hand, response, both? last this I you, actually How think it question, save? how And this, And in mindset people so resourceful obviously grow? want you on being I much that I Richard, what is tell is of why about

I it either think or is So I both. don't think it's

of the new, But when of become in the invest the optimal also but risk. we of doing I way by what that? to so execution need think is talk And of some in things, we new. investing need more deprioritizing about the some efficient You we're to some existing

we we about ] we it isn't the execution. initiatives? some growth is exactly hurdle prove think the buy how X, executing of [ right do about rate it. -- ways working? different I newer strategy. It It we is have, to about If how right of something quickly more think about the and how is thing framing out constraining is It's that can these resources do

I They're the of is looking the of the that I, good the teams. team because having also sort that teams momentum these currently momentum to mindset rest Paul that in some we're business the excited is the different a when are talking things as there's questions see it they and news and to types to when the to this. well. do show of excited. of They're that that excited fuels think at the And Those and Ben, path we're how are translates

been of But these harder a slog of to this. have I so some if had ever through think honestly discussions X.X going of from we of stuff year, good this of riff actually do of gone we we've sort just would do that if have to X to about years learn, do it I backdrop had really to a course. has the past fun we the hard year. plenty And now. feel course, all but things optimism through The team never

leave. of the the and so happy translated company of into know to But gratitude and heading us, have has and behind a sense we're about healthier this Spotify. and everyone had to And we how part a been excited it's team to where is we're where I feel obviously huge who are we then

Bryan Goldberg

thinking take take reasonable is going to and going between last in reported advertising regarding Ripps is on what podcasting. question, Joe fashion the looking to we're We're engagement deemphasizing to how assume Is Maria a to it to the profitability and was about Spotify podcast revenue right. Rogan? question, its by exclusivity? that or company Street in Wall And the one most similar Journal trade-off Maria's structure All of deals

Daniel Ek

Yes.

equally we've is wasn't been press in these the XXXX, that years, revenue And what here incentivized we better to drive for deliver few exclusivity actually deals Maria, sort aligned in we And see wants most past of while course, But that it with been some We drive and feel creator. just also we're learning of we over able both audience. can making we to these then are exclusivities as some -- to -- we've a about most The upside. got of both had audience of growth think, have that all mentioned if even strategies because been I generally, position creator the wanted. these things. I is new deals headlines. It the are in of of the rate, multiple broader I share where creator generally growth aligned we've speaking, these podcasting. of already wasn't and, that growth sort with with like worked, what

even side, smaller So deals we structure and and forward a I our think is think the and much more team was on a innovate it we're basis the years few were very will in because just we be the path ago many Spotify than today, on a of is, a create that MAU cases, and able to going podcasting more different position healthy player see in in already. #X I podcasting on the because

exclusivity gain additional you're And about aligned than too. far is So the player, exclusivity this better the smaller of are feels bigger smaller being aligned. value makes it sense value's to when playing at is with Spotify, the we it view, When trying point scale. of who from a also you're the that is

Bryan Goldberg

closing session our and Great. back to everyone, Thanks, some your question-and-answer to like questions. going remarks. and thanks, over for for Maria, to Daniel conclude turn it today, I'd That's

Daniel Ek

Bryan. Thanks, Yes.

that we they more forward. opportunities and make on bets, platform will hopefully, disciplined going invest ways Spotify big and artists, it's But small our with bold for seize Hopefully, the sense. the to continue and now we on and call clear the during when and you long-term authors opportunity approach strong. heard is to The for now to make continue make deliver listeners and the innovate will no mistake during And much in that session. creators Q&A our

Thanks, us today. everyone, for joining

Bryan Goldberg

Great. will today's replay website Spotify also the concludes Spotify and that replays. call. be on call A on app Okay. And earnings available under our

everyone, Thanks, for joining.

Operator

Fourth Quarter Call XXXX Spotify's and concludes participation. your for Thank This you Webcast. Earnings

You may now disconnect.

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