Slide 1: Q3 2024 Update
Q3 2024 Update November 12th, 2024
Slide 2: Table of 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.19 Financial Statements p.22 2
Slide 3: Executive Summary
Executive Summary The business delivered strong Q3 results, as all of our USER & FINANCIAL SUMMARY Q3 2023 Q2 2024 Q3 2024 Y/Y Q/Q KPIs met or exceeded guidance and profitability reached record levels. MAU net additions ticked up to 14 million, USERS (M) Total Monthly Active Users ("MAUs") 574 626 6
Slide 4: Key Highlights
Key Highlights Double digit Y/Y growth in Strong Revenue growth with Expanded user experiences MAUs and Subscribers record high profitability and engagement globally ● MAUs grew 11% Y/Y to 640 million, ● Total Revenue grew 19% Y/Y to €4.0 ● Launched AI DJ to Spanish- reflecting Y/Y and Q/Q growth bi
Slide 5: Key Highlights: Actuals vs. Guidance
Key Highlights: Actuals vs. Guidance Results Q3 2024 Actuals Guidance Monthly Active Users (M) Above 640 639 Users Premium Subscribers (M) Above 252 251 Results Q3 2024 Actuals Guidance Total Revenue (€B) In-Line €4.0 €4.0 Financials Gross Margin Above 31.1% 30.2% Operating Income (€M)* Above €454 €
Slide 6: Financial Summary
FINANCIAL SUMMARY
Slide 7: Financial Summary
Financial Summary USER, FINANCIAL & LIQUIDITY SUMMARY Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Y/Y Y/Y FXN* USERS (M) Total Monthly Active Users ("MAUs") 574 602 615 626 640 11% -- Premium Subscribers 226 236 239 246 252 12% -- Ad-Supported MAUs 361 379 388 393 402 11% -- FINANCIALS (€M) Premium 2,91
Slide 8: Financial Summary
Financial Summary Revenue Revenue of €3,988 million grew 19% Y/Y in Q3 (or 21% Y/Y constant currency*), reflecting: ● Premium Revenue growth of 21% Y/Y (or 24% Y/Y constant currency*), driven by subscriber gains and ARPU increases; and ● Ad-Supported Revenue growth of 6% Y/Y (or 7% Y/Y constant curr
Slide 9: Revenue
Revenue Improved Premium growth led by ARPU acceleration Premium Revenue grew 21% Y/Y to €3,516 million (or 24% Y/Y constant currency*), reflecting subscriber growth of 12% Y/Y and a Premium ARPU increase of 9% Y/Y to €4.71 (or up 11% Y/Y constant currency* vs. 10% Y/Y in Q2’24). Excluding the impac
Slide 10: Gross Margin
Gross Margin Driven by broad-based favorability across Premium and Ad-Supported segments Gross Margin finished at 31.1% in Q3, up 473 Premium Gross Margin was 33.5% in Q3, up Ad-Supported Gross Margin was 13.1% bps Y/Y. The Y/Y trend was driven by 436 bps Y/Y. The Y/Y trend was driven by in Q3, up 4
Slide 11: Operating Expenses
Operating Expenses Y/Y declines driven by increased focus on efficiency Operating Expenses declined 8% Y/Y in Q3. Y/Y currency movements contributed ~200 bps of the Operating Expense decline, while Y/Y changes in Social Charge movements elevated Y/Y expense growth by ~800 bps. The remaining 14% Y/Y
Slide 12: Free Cash Flow
Free Cash Flow Record performance aids balance sheet strength Free Cash Flow was €711 million in Q3, a record high as a result of higher Net Income adjusted for non-cash items and favorability in net working capital. Capital expenditures rose $3 million Y/Y to €4 million. While the magnitude of Free
Slide 13: MAUs & Subscribers
MAUS & SUBSCRIBERS
Slide 14: Monthly Active Users (MAUs)
Monthly Active Users (MAUs) Total MAUs grew 11% Y/Y to 640 million, up from 626 million last quarter and 1 million above our guidance. Quarterly performance reflected: ● Q/Q and Y/Y growth across all regions, led by Rest of World and Latin America ● Continued recalibration of our marketing activitie
Slide 15: Premium Subscribers
Premium Subscribers Our Premium Subscribers grew 12% Y/Y to 252 million, up from 246 million last quarter and 1 million above guidance. Quarterly performance reflected: ● Q/Q and Y/Y growth across all regions, with outperformance led by Europe and Latin America ● Continued strong promotional campaig
Slide 16: Product & Platform
PRODUCT & PLATFORM
Slide 17: Expanding Music Features and Personalization
Expanding Music Features and Personalization Launched Music Videos in Beta in 85 new Expanded AI DJ to Spanish-speaking music After launching in select markets last quarter, markets (97 markets in total), giving Premium fans in 18 markets and expanded Daylist to expanded AI Playlist in Beta to the U
Slide 18: Growing User Experiences
Growing User Experiences Rolled out comments for podcasts, bringing Celebrated our first anniversary of Launched first-of-its-kind vodcast series interactivity into the podcast industry, enabling Audiobooks in Premium and expanded this “Countdown to” with Jelly Roll and mgk. podcast creators to bett
Slide 19: Outlook
OUTLOOK
Slide 20: Outlook for Q4'24
Outlook for Q4’24 The following forward-looking statements reflect Spotify’s expectations for Q4 2024 as of November 12, 2024 and are subject to substantial uncertainty. Total MAUs 665 million Implies the addition of approximately 25 million net new MAUs in the quarter Total Premium Subscribers 260
Slide 21: Webcast Information and Use of Non-IFRS Measures
Webcast Information We will host a live question and answer session starting at 5:00 p.m. ET today on investors.spotify.com. Daniel Ek, our Founder and CEO, and Christian Luiga, our Chief Financial Officer, will be on hand to answer questions submitted through slido.com using the event code #Spotify
Slide 22: Financial Statements
FINANCIAL STATEMENTS
Slide 23: 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 24: 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 25: Interim condensed consolidated statement of operations
Interim condensed consolidated statement of operations (Unaudited) (in € millions, except share and per share data) Three months ended September 30, 2024 June 30, 2024 September 30, 2023 Revenue 3,988 3,807 3,357 Cost of revenue 2,748 2,695 2,472 Gross profit 1,240 1,112 885 Research and development
Slide 26: Interim condensed consolidated statement of financial position
Interim condensed consolidated statement of financial position (Unaudited) (in € millions) September 30, 2024 December 31, 2023 Assets Non-current assets Lease right-of-use assets 235 300 Property and equipment 195 247 Goodwill 1,128 1,137 Intangible assets 58 84 Long term investments 1,604 1,215 Re
Slide 27: Interim condensed consolidated statement of cash flows
Interim condensed consolidated statement of cash flows (Unaudited) (in € millions) Three months ended September 30, 2024 June 30, 2024 September 30, 2023 Operating activities Net income 300 274 65 Adjustments to reconcile net income to net cash flows Depreciation of property and equipment 21 21 26 A
Slide 28: Calculation of basic and diluted earnings per share
Calculation of basic and diluted earnings per share (Unaudited) (in € millions, except share and per share data) Three months ended September 30, 2024 June 30, 2024 September 30, 2023 Basic earnings per share Net income attributable to owners of the parent 300 274 65 Shares used in computation: Weig
Slide 29: 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 September 30, 2024 September 30, 2023 IFRS revenue 3,988 3,357 Foreign exchange effect on 2024 revenue using 2023 rates (90) Revenue excluding foreign ex
Slide 30: 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 September 30, 2024 September 30, 2023 IFRS Operating expenses 786 853 Foreign exchange effect on 2024 operating expenses using 2023 rates (13)
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 March 31, June 30, September December March 31, June 30, September December March 31, June 30, September December March 31, June 30, September 2021 2021 30, 2021 31, 2021 2022 2022 30, 2022 31, 2
Slide 32: Appendix
APPENDIX
Slide 33: Social Charges Sensitivity
Social Charges Sensitivity Meaningful movements in our stock price can lead to Social Charge variance Our guidance incorporates the impact of Social Charges, the vast majority of which appear in Operating Expenses. The amount of Social Charges we accrue for and ultimately pay can be volatile, as the
Slide 34: Slide 34