Slide 1: Q4 2023 Update
Q4 2023 Update February 6th, 2024 1
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 2
Slide 3: Executive Summary
Executive Summary We ended 2023 with strong Q4 performance, as all of our USER & FINANCIAL SUMMARY Q4 2022 Q3 2023 Q4 2023 Y/Y Q/Q KPIs met or exceeded guidance. MAU net additions of 28 million surpassed guidance by 1 million. Subscriber net USERS (M) additions of 10 million were also ahead by 1 mil
Slide 4: Key Highlights
Key Highlights MAU and Subscriber Accelerating constant 9th Annual Spotify Wrapped outperformance drives record currency* Revenue growth Campaign draws more than full year results and Gross Margin expansion 225 million MAU ● MAUs grew 23% Y/Y to 602 million, ● Total Revenue grew 16% Y/Y ● Users enga
Slide 5: Key Highlights: Actuals vs. Guidance
Key Highlights: Actuals vs. Guidance Results Q4 2023 Actuals Guidance Monthly Active Users (M) Above 602 601 Users Premium Subscribers (M) Above 236 235 Results Q4 2023 Actuals Guidance Total Revenue (€B) In-line €3.7 €3.7 Financials Gross Margin Above 26.7% 26.6% Operating (Loss)/Income (€M) Above
Slide 6: Financial Summary
FINANCIAL SUMMARY 6
Slide 7: Financial Summary
Financial Summary USER, FINANCIAL & LIQUIDITY SUMMARY Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Y/Y Y/Y FXN* USERS (M) Total Monthly Active Users ("MAUs") 489 515 551 574 602 23% -- Premium Subscribers 205 210 220 226 236 15% -- Ad-Supported MAUs 295 317 343 361 379 28% -- FINANCIALS (€M) Premium 2,71
Slide 8: Financial Summary
Financial Summary Revenue Revenue of €3,671 million grew 16% Y/Y in Q4 (or 20% Y/Y constant currency*), reflecting: ● Premium Revenue growth of 17% Y/Y (or 21% Y/Y constant currency*), led by subscriber gains and the effects of price increases; and ● Ad-Supported Revenue growth of 12% Y/Y (or 17% Y/
Slide 9: Revenue
Revenue Premium growth led by subscribers and pricing Premium Revenue grew 17% Y/Y to €3,170 million (or 21% Y/Y constant currency*), reflecting subscriber growth of 15% Y/Y and a Premium ARPU increase of 1% Y/Y to €4.60 (or up 5% Y/Y constant currency). Excluding the impact of FX, ARPU performance
Slide 10: Gross Margin
Gross Margin Podcasting and Music gains + Other Cost of Revenue favorability aid expansion Gross Margin finished at 26.7% in Q4, up 140 Premium Gross Margin was 29.1% in Q4, up Ad-Supported Gross Margin was 11.6% bps Y/Y. The Y/Y trend reflects improvement in 45 bps Y/Y. The Y/Y trend reflects in Q4
Slide 11: Operating Expenses
Operating Expenses Y/Y increase driven by efficiency related charges Operating Expenses grew 2% Y/Y (or 6% constant currency*) due primarily to €139 million in charges related to efficiency efforts, which contributed ~1,300 bps to Y/Y growth. Additionally, Y/Y changes in Social Charge movements of €
Slide 12: Free Cash Flow
Free Cash Flow Building and sustaining a strong balance sheet Free Cash Flow was €396 million in Q4, an increase Y/Y as a result of increased favorability in net working capital and higher Net Income adjusted for non-cash items. Additionally, capital expenditures declined €4 million Y/Y to €1 millio
Slide 13: MAUs & Subscribers
MAUS & SUBSCRIBERS 13
Slide 14: Monthly Active Users (MAUs)
Monthly Active Users (MAUs) Total MAUs grew 23% Y/Y to 602 million, up from 574 million last quarter and above our guidance by 1 million. Quarterly performance versus our guidance was impacted by: ● Sustained double digit Y/Y growth in all regions ● Outperformance in Latin America and Rest of World
Slide 15: Premium Subscribers
Premium Subscribers Our Premium Subscribers grew 15% Y/Y to 236 million, up from 226 million last quarter and above our guidance by 1 million. Quarterly performance versus our guidance was impacted by: ● Double-digit Y/Y growth across all regions ● Outperformance led by Rest of World and Latin Ameri
Slide 16: Product & Platform
PRODUCT & PLATFORM 16
Slide 17: 9th Annual Wrapped Campaign
9th Annual Wrapped Campaign On November 29, 2023, we launched the 9th annual year-end Spotify Wrapped campaign to users in 170 markets. Collectively, more than 225 million MAUs engaged with Wrapped content in Q4 (up more than 40% Y/Y) with strong Y/Y growth across all regions and demographics. The 2
Slide 18: Building the World's #1 Audio Network
Building the World’s #1 Audio Network Expanded the Spotify Audience Network In November, made over 200,000 audiobooks available Launched a new original podcast, (SPAN) into five new markets, including India, to eligible Premium Subscribers in the United States with What Now? with Trevor Noah, Japan,
Slide 19: Music
Music Bad Bunny’s pre-release campaign for his new Launched our first ever in-app Merch To launch Spotify’s annual Wrapped Campaign, Taylor album, nadie sabe lo que va a pasar mañana, Hub, which provides personalized Swift was named the Top Global Artist for 2023 with had the most successful Countdo
Slide 20: Outlook
OUTLOOK 20
Slide 21: Outlook for Q1'24
Outlook for Q1’24 The following forward-looking statements reflect Spotify’s expectations for Q1 2024 as of February 6, 2024 and are subject to substantial uncertainty. Total MAUs 618 million Implies the addition of approximately 16 million net new MAUs in the quarter Total Premium Subscribers 239 m
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 Paul Vogel, our Chief Financial Officer, will be on hand to answer questions submitted through slido.com using the event code #SpotifyEarni
Slide 23: Financial Statements
FINANCIAL STATEMENTS 23
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. 24
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. 25
Slide 26: Consolidated statement of operations
Consolidated statement of operations (Unaudited) (in € millions, except share and per share data) Three months ended Twelve months ended December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Revenue 3,671 3,357 3,166 13,247 11,727 Cost of revenue 2,691 2,472 2,36
Slide 27: Consolidated statement of financial position
Consolidated statement of financial position (Unaudited) (in € millions) December 31, 2023 December 31, 2022 Assets Non-current assets Lease right-of-use assets 300 417 Property and equipment 247 348 Goodwill 1,137 1,168 Intangible assets 84 127 Long term investments 1,215 1,138 Restricted cash and
Slide 28: Consolidated statement of cash flows
Consolidated statement of cash flows (Unaudited) (in € millions) Three months ended Twelve months ended December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Operating activities Net (loss)/income (70) 65 (270) (532) (430) Adjustments to reconcile net (loss)/inco
Slide 29: Calculation of basic and diluted (loss)/earnings per share
Calculation of basic and diluted (loss)/earnings per share (Unaudited) (in € millions, except share and per share data) Three months ended Twelve months ended December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Basic (loss)/earnings per share Net (loss)/income
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 Twelve months ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 IFRS revenue 3,671 3,166 13,247 11,727 Foreign exchange effec
Slide 31: Reconciliation of IFRS to non-IFRS results
Reconciliation of IFRS to non-IFRS results Operating expenses on a constant currency basis (Unaudited) (in € millions, except percentages) Three months ended Twelve months ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 IFRS Operating expenses 1,055 1,032 3,843 3,585 Fo
Slide 32: Reconciliation of IFRS to non-IFRS results
Reconciliation of IFRS to non-IFRS results Free Cash Flow (Unaudited) (in € millions) Three months ended June 30, September December March 31, June 30, September December March 31, June 30, September December March 31, June 30, September December 2020 30, 2020 31, 2020 2021 2021 30, 2021 31, 2021 20
Slide 33: Reconciliation of IFRS to non-IFRS results
Reconciliation of IFRS to non-IFRS results Adjusted operating income (Unaudited) (in € millions, except percentages) Three months ended December 31, 2023 IFRS operating loss (75) Adjustments: Add: Employee severance and related charges 110 (1) Add: Impairmment charge on real estate assets 33 (2) Tot
Slide 34: Spotify