Slide 1: Q4 2022 Update
Q4 2022 Update January 31st, 2023 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.21 Financial Statements p.24 2 2
Slide 3: Executive Summary
Executive Summary We ended 2022 with strong Q4 performance as nearly USER & FINANCIAL SUMMARY Q4 2021 Q3 2022 Q4 2022 Y/Y Q/Q all of our KPIs surpassed guidance. MAU net additions reached a quarterly record-high of 33 million in Q4, 10 USERS (M) million above guidance. Subscriber growth also Total M
Slide 4: Key Highlights
Key Highlights Record high MAU growth of 18% Y/Y Revenue growth and 8th Annual Spotify Wrapped 33 million net additions 25.3% Gross Margin Campaign draws more than 150 million MAU ● MAUs grew 20% Y/Y to 489 million, ● Total Revenue grew 18% Y/Y ● Users engaging with the 8th 10 million above guidance
Slide 5: Key Highlights: Actuals vs. Guidance
Key Highlights: Actuals vs. Guidance Results Q4 2022 Actuals Guidance Monthly Active Users (M) Above 489 479 Users Premium Subscribers (M) Above 205 202 Results Q4 2022 Actuals Guidance Total Revenue (€B) Inline €3.2 €3.2 Financials Gross Margin Above 25.3% 24.5% Operating (Loss)/Income (€M) Above (
Slide 6: Financial Summary
FINANCIAL SUMMARY 6
Slide 7: Financial Summary
Financial Summary USER, FINANCIAL & LIQUIDITY SUMMARY Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Y/Y USERS (M) Total Monthly Active Users ("MAUs") 406 422 433 456 489 20% Premium Subscribers 180 182 188 195 205 14% Ad-Supported MAUs 236 252 256 273 295 25% FINANCIALS (€M) Premium 2,295 2,379 2,504 2,65
Slide 8: Financial Summary
Financial Summary Revenue Revenue of €3,166 million grew 18% Y/Y in Q4 (or 12% Y/Y constant currency), reflecting: ● Premium Revenue growth of 18% Y/Y (or 13% Y/Y constant currency), led by subscriber gains; ● Ad-Supported Revenue growth of 14% Y/Y (or 4% Y/Y constant currency), led by podcasting; a
Slide 9: Revenue
Revenue Resilient Premium growth, led by subscribers Premium Revenue grew 18% Y/Y to €2,717 million, reflecting subscriber growth of 14% Y/Y and Premium ARPU¹ growth of 3% Y/Y to €4.55 (or down 1% constant currency). Excluding the impact of FX, ARPU performance was slightly impacted by product and m
Slide 10: Gross Margin
Gross Margin Marketplace and podcasting benefits offset by content and product investments Gross Margin finished at 25.3% in Q4, down Premium Gross Margin was 28.6% in Q4, Ad-Supported Gross Margin was 5.1% 118 bps Y/Y. The Y/Y trend reflects stable down 56 bps Y/Y. The Y/Y trend reflects in Q4, dow
Slide 11: Operating Expenses
Operating Expenses Growth largely driven by headcount expansion and unfavorable FX impact Operating Expenses grew 44% Y/Y (or 36% constant currency), driven primarily by higher personnel costs related to headcount growth (global ad sales team, platform investment and acquisitions) and higher adverti
Slide 12: Free Cash Flow
Free Cash Flow Building and sustaining a strong balance sheet Free Cash Flow was (€73) million in Q4, a decrease Y/Y as a result of lower Net Income adjusted for non-cash items and reduced favorability in net working capital. Capital expenditures decreased €11 million Y/Y to €5 million as a result o
Slide 13: MAUs & Subscribers
MAUS & SUBSCRIBERS 13
Slide 14: Monthly Active Users (MAUs)
Monthly Active Users (MAUs) Total MAUs grew 20% Y/Y to 489 million, up from 456 million last quarter and above our guidance by 10 million. Quarterly performance versus our guidance was impacted by: ● Outperformance in Rest of World led by India and Indonesia as a result of successful marketing campa
Slide 15: Premium Subscribers
Premium Subscribers Our Premium Subscribers grew 14% Y/Y to 205 million, up from 195 million last quarter. Quarterly performance versus our guidance was impacted by: ● Outperformance across all regions, led by Latin America ● Better than expected Q4 promotional campaign results across all regions ●
Slide 16: Product & Platform
PRODUCT & PLATFORM 16
Slide 17: 8th Annual Wrapped Campaign
8th Annual Wrapped Campaign On November 30, 2022, we launched the 8th annual year-end Spotify Wrapped campaign to users in 111 markets. Collectively, 156 million MAUs engaged with Wrapped content in Q4 (up 30% Y/Y) and there was strong Y/Y growth in engagement across all regions and demographics. Th
Slide 18: Podcasting
Podcasting Announced that Brought our four million+ Partnered with VICE The U.K.’s Keep It Light Launched a new offering in Emma Chamberlain’s podcasts to South Korea Media Group Asia to Media joined Megaphone Europe that gives Megaphone hit podcast Anything so that more fans than ever bring five ne
Slide 19: Music Releases
Music Releases On October 21st, Taylor Swift released On October 14th, we launched our artist In early December, Maria Becerra her 10th studio album, Midnights, marketing campaign in support of released her album, La Nena de which became Spotify’s most-streamed Bailey Zimmerman’s debut EP, Leave Arg
Slide 20: Google User Choice Billing Rollout
Google User Choice Billing Rollout In November, we rolled-out the first iteration of User Choice Billing to select Spotify users in 10+ markets. Over the last few months, we've expanded the roll-out to more than 140 markets around the world. 20
Slide 21: Outlook
OUTLOOK 21
Slide 22: Outlook for Q1'23
Outlook for Q1’23 The following forward-looking statements reflect Spotify’s expectations for Q1 2023 as of January 31, 2023 and are subject to substantial uncertainty. Total MAUs 500 million Implies the addition of approximately 11 million net new MAUs in the quarter Total Premium Subscribers 207 m
Slide 23: 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 24: Financial Statements
FINANCIAL STATEMENTS 24
Slide 25: 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. 25
Slide 26: 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. 26
Slide 27: Trending Charts
Trending Charts MAU & Subscriber Net Additions 4 Yr. MAU Avg. = 71mn 4 Yr. Subscriber Avg. = 27mn * All figures exclude Russia. 27
Slide 28: 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, 2022 September 30, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Revenue 3,166 3,036 2,689 11,727 9,668 Cost of revenue 2,365 2,286 1,977
Slide 29: Consolidated statement of financial position
Consolidated statement of financial position (Unaudited) (in € millions) December 31, 2022 December 31, 2021 Assets Non-current assets Lease right-of-use assets 417 437 Property and equipment 348 372 Goodwill 1,168 894 Intangible assets 127 89 Long term investments 1,138 916 Restricted cash and othe
Slide 30: Consolidated statement of cash flows
Consolidated statement of cash flows (Unaudited) (in € millions) Three months ended Twelve months ended December 31, 2022 September 30, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Operating activities Net loss (270) (166) (39) (430) (34) Adjustments to reconcile net loss to net cash f
Slide 31: Calculation of basic and diluted loss per share
Calculation of basic and diluted loss per share (Unaudited) (in € millions, except share and per share data) Three months ended Twelve months ended December 31, 2022 September 30, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Basic loss per share Net loss attributable to owners of the p
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 Twelve months ended December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 IFRS revenue 3,166 2,689 11,727 9,668 Foreign exchange effect
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 June 30, September December March 31, June 30, September December March 31, June 30, September December March 31, June 30, September December 2019 30, 2019 31, 2019 2020 2020 30, 2020 31, 2020 20
Slide 34: 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 December 31, 2022 December 31, 2021 IFRS Operating expenses 1,032 719 Foreign exchange effect on 2022 operating expenses using 2021 rates 54 O
Slide 35: Slide 35