Slide 1: Q1 2023 Update
Q1 2023 Update April 25th, 2023 1
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.22 Financial Statements p.25 2 2
Slide 3: Executive Summary
Executive Summary The strength we saw exiting 2022 continued into 2023, USER & FINANCIAL SUMMARY Q1 2022 Q4 2022 Q1 2023 Y/Y Q/Q as nearly all of our Q1 KPIs surpassed expectations. MAU net additions of 26 million were 15 million above USERS (M) guidance, our highest Q1 ever and the fifth quarter in
Slide 4: Key Highlights
Key Highlights Record high Q1 MAU growth 14% Y/Y Revenue growth and Multiple updates to the of 26 million net additions 25.2% Gross Margin Spotify experience unveiled at Stream On ● MAUs grew 22% Y/Y to 515 million, ● Total Revenue grew 14% Y/Y ● Launched the beta version of AI DJ 15 million above g
Slide 5: Key Highlights: Actuals vs. Guidance
Key Highlights: Actuals vs. Guidance Results Q1 2023 Actuals Guidance Monthly Active Users (M) Above 515 500 Users Premium Subscribers (M) Above 210 207 Results Q1 2023 Actuals Guidance Total Revenue (€B) Below €3.0 €3.1 Financials Gross Margin Above 25.2% 24.9% Operating (Loss)/Income (€M) Above (€
Slide 6: Financial Summary
FINANCIAL SUMMARY 6
Slide 7: Financial Summary
Financial Summary USER, FINANCIAL & LIQUIDITY SUMMARY Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Y/Y USERS (M) Total Monthly Active Users ("MAUs") 422 433 456 489 515 22% Premium Subscribers 182 188 195 205 210 15% Ad-Supported MAUs 252 256 273 295 317 26% FINANCIALS (€M) Premium 2,379 2,504 2,651 2,71
Slide 8: Financial Summary
Financial Summary Revenue Revenue of €3,042 million grew 14% Y/Y in Q1 (or 13% Y/Y constant currency), reflecting: ● Premium Revenue growth of 14% Y/Y (or 13% Y/Y constant currency), led by subscriber gains; and ● Ad-Supported Revenue growth of 17% Y/Y (or 13% Y/Y constant currency) Profitability Gr
Slide 9: Revenue
Revenue Consistent Premium growth, led by subscribers Premium Revenue grew 14% Y/Y to €2,713 million (or 13% Y/Y constant currency, comparable to Q4’22 performance), reflecting subscriber growth of 15% Y/Y and Premium ARPU¹ decline of 1% Y/Y to €4.32 (or down 2% constant currency). Excluding the imp
Slide 10: Gross Margin
Gross Margin Marketplace and podcasting benefits offset by higher Other Cost of Revenue Gross Margin finished at 25.2% in Q1, flat Y/Y. Premium Gross Margin was 28.6% in Q1, up Ad-Supported Gross Margin was (3.0)% The Y/Y trend reflects improved music 23bps Y/Y. The Y/Y trend reflects in Q1, down 16
Slide 11: Operating Expenses
Operating Expenses Primarily driven by residual headcount growth Operating Expenses grew 36% Y/Y (or 34% constant currency), driven primarily by higher personnel costs related to the headcount expansion we undertook over the course of 2022. This was partially offset by lower marketing and legal cost
Slide 12: Free Cash Flow
Free Cash Flow Building and sustaining a strong balance sheet Free Cash Flow was €57 million in Q1, an increase Y/Y as higher Operating Loss was more than offset by favorable movements in net working capital and higher interest income. Additionally, capital expenditures declined €8 million Y/Y to €2
Slide 13: MAUs & Subscribers
MAUS & SUBSCRIBERS 13
Slide 14: Monthly Active Users (MAUs)
Monthly Active Users (MAUs) Total MAUs grew 22% Y/Y to 515 million, up from 489 million last quarter and above our guidance by 15 million. Quarterly performance versus our guidance was impacted by: ● Outperformance across all regions driven by reactivations and a Q/Q decrease in Ad-Supported MAU chu
Slide 15: Premium Subscribers
Premium Subscribers Our Premium Subscribers grew 15% Y/Y to 210 million, up from 205 million last quarter. Quarterly performance versus our guidance was impacted by: ● Outperformance across all regions, led by Europe and Latin America ● Higher top-of-funnel growth driving increased subscribers ● Reg
Slide 16: Product & Platform
PRODUCT & PLATFORM 16
Slide 17: AI DJ Launch
AI DJ Launch During the quarter, we launched a beta version of AI DJ to users in North America to allow for deeper discovery and personalization. AI DJ combines the power of our personalization technology with cutting-edge generative AI and a realistic AI voice enabled by technology from our previou
Slide 18: 2023 Stream On Creator Highlights
2023 Stream On Creator Highlights Announced ways to help artists Invited new listeners and fans to Created a one-stop-shop for creators Enhanced podcast monetization amplify their content with campaign connect with artists and build fandom to access our tools, including opportunities with our new Pa
Slide 19: Redesigned Spotify User Experience
Redesigned Spotify User Experience At Stream On, we announced one of the biggest changes to our user experience. With this new design, we’re giving fans an even more active role in the audio discovery process and giving creators even more space to share their work. Powered by advanced recommendation
Slide 20: Podcasting
Podcasting Announced a multiyear exclusive video Brought British journalist Louis Two new publishers join the Revealed that Forbidden Fruits partnership with Markiplier for Theroux to the platform with the Spotify Audience Network: NPR with Julia Fox and Niki Takesh will Distractible and Go! My Favo
Slide 21: Music
Music Morgan Wallen released his third studio album One Thing At A Time breaking records for the most-streamed album in a single Debuted RapCaviar Presents, a six- Rosalia became the first artist day by a male artist. episode documentary on Hulu exploring to be celebrated across both the music and l
Slide 22: Outlook
OUTLOOK 22
Slide 23: Outlook for Q2'23
Outlook for Q2’23 The following forward-looking statements reflect Spotify’s expectations for Q2 2023 as of April 25, 2023 and are subject to substantial uncertainty. Total MAUs 530 million Implies the addition of approximately 15 million net new MAUs in the quarter Total Premium Subscribers 217 mil
Slide 24: Webcast Information
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 25: Financial Statements
FINANCIAL STATEMENTS 25
Slide 26: 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. 26
Slide 27: 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. 27
Slide 28: 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, 2023 December 31, 2022 March 31, 2022 Revenue 3,042 3,166 2,661 Cost of revenue 2,276 2,365 1,990 Gross profit 766 801 671 Research and development 435 415
Slide 29: Interim condensed consolidated statement of financial position
Interim condensed consolidated statement of financial position (Unaudited) (in € millions) March 31, 2023 December 31, 2022 Assets Non-current assets Lease right-of-use assets 413 417 Property and equipment 331 348 Goodwill 1,155 1,168 Intangible assets 115 127 Long term investments 1,134 1,138 Rest
Slide 30: Interim condensed consolidated statement of cash flows
Interim condensed consolidated statement of cash flows (Unaudited) (in € millions) Three months ended March 31, 2023 December 31, 2022 March 31, 2022 Operating activities Net (loss)/income (225) (270) 131 Adjustments to reconcile net (loss)/income to net cash flows Depreciation of property and equip
Slide 31: 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 March 31, 2023 December 31, 2022 March 31, 2022 Basic (loss)/earnings per share Net (loss)/income attributable to owners of the parent (225) (270) 131 Shares use
Slide 32: 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, 2023 March 31, 2022 IFRS revenue 3,042 2,661 Foreign exchange effect on 2023 revenue using 2022 rates 26 Revenue excluding foreign exchange eff
Slide 33: 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, 2019 31, 2019 2020 2020 30, 2020 31, 2020 2021 2
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