Slide 1: Q1 2024 Update
Q1 2024 Update April 23rd, 2024
Slide 2: Contents
Executive Summary p.03 Key Highlights p.04 Financial Summary p.06 Table of MAUs & Subscribers p.13 Contents Product & Platform p.16 Outlook p.20 Financial Statements p.23 2
Slide 3: Executive Summary
Executive Summary The business performed well in Q1, led by healthy USER & FINANCIAL SUMMARY Q1 2023 Q4 2023 Q1 2024 Y/Y Q/Q subscriber gains, improved monetization and record strength in profitability. Although we saw greater MAU USERS (M) variability during the quarter amidst moderated marketing T
Slide 4: Key Highlights
Key Highlights Double digit Y/Y growth in Accelerating constant Unveiled new experiences for MAUs and Subscribers currency* Revenue with users alongside growing record high profitability music industry partnership ● MAUs grew 19% Y/Y to 615 million, ● Total Revenue grew 20% Y/Y to €3.6 ● Launched mu
Slide 5: Key Highlights: Actuals vs. Guidance
Key Highlights: Actuals vs. Guidance Results Q1 2024 Actuals Guidance Monthly Active Users (M) Below 615 618 Users Premium Subscribers (M) In-line 239 239 Results Q1 2024 Actuals Guidance Total Revenue (€B) In-Line €3.6 €3.6 Financials Gross Margin Above 27.6% 26.4% Operating Income (€M)* Below €168
Slide 6: Financial Summary
FINANCIAL SUMMARY
Slide 7: Financial Summary
Financial Summary USER, FINANCIAL & LIQUIDITY SUMMARY Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Y/Y Y/Y FXN* USERS (M) Total Monthly Active Users ("MAUs") 515 551 574 602 615 19% -- Premium Subscribers 210 220 226 236 239 14% -- Ad-Supported MAUs 317 343 361 379 388 22% -- FINANCIALS (€M) Premium 2,71
Slide 8: Financial Summary
Financial Summary Revenue Revenue of €3,636 million grew 20% Y/Y in Q1 (or 21% Y/Y constant currency*), reflecting: ● Premium Revenue growth of 20% Y/Y (or 21% Y/Y constant currency*), driven by subscriber gains and ARPU increases; and ● Ad-Supported Revenue growth of 18% Y/Y (or 19% Y/Y constant cu
Slide 9: Revenue
Revenue Improved Premium growth led by ARPU acceleration Premium Revenue grew 20% Y/Y to €3,247 million (or 21% Y/Y constant currency*), reflecting subscriber growth of 14% Y/Y and a Premium ARPU increase of 5% Y/Y to €4.55 (or up 7% Y/Y constant currency vs. 5% Y/Y in Q4’23). Excluding the impact o
Slide 10: Gross Margin
Gross Margin Music and podcast gains along with Other Cost of Revenue favorability aid Y/Y expansion Gross Margin finished at 27.6% in Q1, up 243 Premium Gross Margin was 30.2% in Q1, up Ad-Supported Gross Margin was 6.4% bps Y/Y. The Y/Y trend reflects improvement 155 bps Y/Y. The Y/Y trend reflect
Slide 11: Operating Expenses
Operating Expenses Y/Y declines driven by increased focus on efficiency Operating Expenses declined 9% Y/Y in Q1. Y/Y changes in Social Charge movements elevated Y/Y expense growth by ~800 bps, while the lapping of the prior year charges related to efficiency initiatives lowered expense growth by ~4
Slide 12: Free Cash Flow
Free Cash Flow Building and sustaining a strong balance sheet Free Cash Flow was €207 million in Q1, an increase Y/Y as a result of higher Net Income adjusted for non-cash items, partially offset by working capital headwinds arising from severance payments associated with our December workforce redu
Slide 13: MAUs & Subscribers
MAUS & SUBSCRIBERS
Slide 14: Monthly Active Users (MAUs)
Monthly Active Users (MAUs) Total MAUs grew 19% Y/Y to 615 million, up from 602 million last quarter, but below our guidance by 3 million. Quarterly performance reflected: ● Healthy growth across all regions, led by Latin America and Rest of World ● Moderated marketing activity, which led to more no
Slide 15: Premium Subscribers
Premium Subscribers Our Premium Subscribers grew 14% Y/Y to 239 million, up from 236 million last quarter and in-line with guidance. Quarterly performance reflected: ● Continued double-digit Y/Y growth across all regions ● Strong performance of Family and Duo plans
Slide 16: Product & Platform
PRODUCT & PLATFORM
Slide 17: Music
Music Launched music videos in beta for Spotify Premium users Launched Song Psychic, a new music engagement feature where across 11 markets, adding another way to enhance the artist-to-fan users are able to get answers to topics ranging from My Future to connection. Life’s Greatest Mysteries in the
Slide 18: Building the World's #1 Audio Network
Building the World’s #1 Audio Network Launched the Audiobooks Access Tier in the US, Announced AUX, Spotify’s in-house music advisory which provides music listeners on the ad-supported agency for brands seeking to use music to enrich their service 15 hours of audiobook listening a month campaigns an
Slide 19: Loud & Clear Report
Loud & Clear Report On March 19, 2024, we published our 4th annual Loud & Clear report which shows the impact that Spotify has on the music industry. For another year, Spotify set the record for the highest annual payment to the music industry from any single retailer: $9B+. Beyond total payouts, th
Slide 20: Outlook
OUTLOOK
Slide 21: Outlook for Q2'24
Outlook for Q2’24 The following forward-looking statements reflect Spotify’s expectations for Q2 2024 as of April 23, 2024 and are subject to substantial uncertainty. Total MAUs 631 million Implies the addition of approximately 16 million net new MAUs in the quarter Total Premium Subscribers 245 mil
Slide 22: Webcast Information and Use of Non-IFRS Measures
Webcast Information We will host a live question and answer session starting at 8:00 a.m. ET today on investors.spotify.com. Daniel Ek, our Founder and CEO, and Ben Kung, our Interim Chief Financial Officer, will be on hand to answer questions submitted through slido.com using the event code #Spotif
Slide 23: Financial Statements
FINANCIAL STATEMENTS
Slide 24: Trending Charts
Trending Charts MAUs, Ad-Supported Users, Premium Subscribers & Revenue By Segment * Last Twelve Months (LTM) represents annual performance covering the preceding 12 months relative to the last day of the quarter.
Slide 25: Trending Charts
Trending Charts Gross Profit by Segment, Gross Margin by Segment & Free Cash Flow * Last Twelve Months (LTM) represents annual performance covering the preceding 12 months relative to the last day of the quarter.
Slide 26: Interim condensed consolidated statement of operations
Interim condensed consolidated statement of operations (Unaudited) (in € millions, except share and per share data) Three months ended March 31, 2024 December 31, 2023 March 31, 2023 Revenue 3,636 3,671 3,042 Cost of revenue 2,632 2,691 2,276 Gross profit 1,004 980 766 Research and development 389 4
Slide 27: Interim condensed consolidated statement of financial position
Interim condensed consolidated statement of financial position (Unaudited) (in € millions) March 31, 2024 December 31, 2023 Assets Non-current assets Lease right-of-use assets 274 300 Property and equipment 224 247 Goodwill 1,159 1,137 Intangible assets 76 84 Long term investments 1,534 1,215 Restri
Slide 28: Interim condensed consolidated statement of cash flows
Interim condensed consolidated statement of cash flows (Unaudited) (in € millions) Three months ended March 31, 2024 December 31, 2023 March 31, 2023 Operating activities Net income/(loss) 197 (70) (225) Adjustments to reconcile net income/(loss) to net cash flows Depreciation of property and equipm
Slide 29: Calculation of basic and diluted earnings/(loss) per share
Calculation of basic and diluted earnings/(loss) per share (Unaudited) (in € millions, except share and per share data) Three months ended March 31, 2024 December 31, 2023 March 31, 2023 Basic earnings/(loss) per share Net income/(loss) attributable to owners of the parent 197 (70) (225) Shares used
Slide 30: Reconciliation of IFRS to non-IFRS results
Reconciliation of IFRS to non-IFRS results Revenue on a constant currency basis (Unaudited) (in € millions, except percentages) Three months ended March 31, 2024 March 31, 2023 IFRS revenue 3,636 3,042 Foreign exchange effect on 2024 revenue using 2023 rates (53) Revenue excluding foreign exchange e
Slide 31: Reconciliation of IFRS to non-IFRS results
Reconciliation of IFRS to non-IFRS results Free Cash Flow (Unaudited) (in € millions) Three months ended September December March 31, June 30, September December March 31, June 30, September December March 31, June 30, September December March 31, 30, 2020 31, 2020 2021 2021 30, 2021 31, 2021 2022 2
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