Slide 1: Q2 2022 Update
Last updated 4pm on July 1 Not a current version Exhibit 99.1 Q2 2022 Update July 27th, 2022
Slide 2: Contents
Last updated 4pm on July 1 Not a current version 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 USER & FINANCIAL SUMMARY Q2 2021 Q1 2022 Q2 2022 Y/Y Q/Q Nearly all of our key metrics surpassed guidance in Q2’22, led by MAU and Subscriber outperformance, USERS (M) healthy Revenue growth and a modestly better Total Monthly Active Users ( MAUs ) 365 422 433 19% 3% Operating Loss
Slide 4: Key Highlights
Key Highlights Accelerating user growth Optimizing capital allocation 23% Y/Y Revenue growth, and consistent subscriber for long-term value creation led by Advertising performance ● MAUs grew 19% Y/Y to 433 million, ● Total Revenue grew 23% Y/Y ● Accelerating expansion into 5 million above guidance.
Slide 5: Key Highlights: Actuals vs. Guidance
Key Highlights: Actuals vs. Guidance Results Q2 2022 Actuals Guidance Monthly Active Users (M) Above 433 428 Users Above 188 187 Premium Subscribers (M) Results Q2 2022 Actuals Guidance Total Revenue (€M) Above €2,864 €2,800 Financials Gross Margin Below 24.6% 25.2% 25.3% 25.2% Adjusted Gross Margin
Slide 6: Financial Summary
FINANCIAL SUMMARY 6
Slide 7: Financial Summary
Financial Summary % Change USER, FINANCIAL & LIQUIDITY SUMMARY Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Y/Y USERS (M) Total Monthly Active Users ( MAUs ) 365 381 406 422 433 19% Premium Subscribers 165 172 180 182 188 14% Ad-Supported MAUs 210 220 236 252 256 22% FINANCIALS (€M) Premium 2,056 2,178 2
Slide 8: Financial Summary
Financial Summary Revenue of €2,864 million grew 23% Y/Y in Q2 (or 15% Y/Y constant currency), reflecting: Revenue ● Premium Revenue growth of 22% Y/Y (or 14% Y/Y constant currency), led by subscriber gains; and ● Ad-Supported Revenue growth of 31% Y/Y (or 17% Y/Y constant currency), led by music an
Slide 9: Revenue
Revenue Consistent Premium growth, led by subscribers Premium Revenue grew 22% Y/Y to €2,504 million, reflecting subscriber growth of 14% Y/Y and Premium ARPU¹ growth of 6% Y/Y to €4.54 (or flat constant currency). Excluding the impact of FX, ARPU performance benefited from price increases implement
Slide 10: Gross Margin
Gross Margin Marketplace and Podcasting benefits offset by content/product investments and Car Thing Accrual Benefit Accrual Benefit Accrual Benefit Car Thing Charge and Accrual Benefit Car Thing Charge and Accrual Benefit Gross Margin finished at 24.6% in Q2, or Premium Gross Margin was 28.0% in Q2
Slide 11: Operating Expenses
Operating Expenses Growth largely driven by headcount expansion and unfavorable FX impact Operating Expenses grew 38% Y/Y (or 28% constant currency), largely reflecting the various growth initiatives that were greenlit toward the end of 2021 and, to a lesser extent, the impact of recent acquisitions
Slide 12: Free Cash Flow
Free Cash Flow The 9th quarter in a row of positive FCF Free Cash Flow was €37 million in Q2, a slight increase Y/Y as lower Net Income adjusted for non-cash items was offset by favorability in net working capital. This was the 9th quarter in a row of positive Free Cash Flow. While the magnitude of
Slide 13: MAUs & Subscribers
MAUS & SUBSCRIBERS 13
Slide 14: Monthly Active Users (MAUs)
Monthly Active Users (MAUs) Total MAUs grew 19% Y/Y to 433 million, up from 422 million last quarter and above our guidance by 5 million. Quarterly performance versus our guidance was impacted by: ● Outperformance in India, Indonesia and The Philippines as a result of marketing campaigns and elevate
Slide 15: Premium Subscribers
Premium Subscribers Our Premium Subscribers grew 14% Y/Y to 188 million, up from 182 million last quarter. Quarterly performance versus our guidance was impacted by: ● Outperformance across all regions led by Europe and Latin America ● Q2 promotional campaign extended one week (5 weeks total vs. 4 w
Slide 16: Product & Platform
PRODUCT & PLATFORM 16
Slide 17: Two Sided Marketplace & Podcasting
Two Sided Marketplace & Podcasting Two Sided Marketplace During the quarter, we continued to see triple digit Y/Y growth in total campaign volume for Sponsored Recommendations. We also announced new targeting features for Sponsored Recommendations created in Spotify for Artists. United States based
Slide 18: Acquisitions
Acquisitions During the quarter, we closed on our acquisition of Findaway. Findaway works across the entire audiobook ecosystem with a platform and offerings that serve authors, publishers and consumers. Their technology will help Spotify accelerate its entrance into the audiobooks market. Additiona
Slide 19: Spotify Live
Spotify Live Spotify Live, formerly known as Spotify Greenroom, allows for fans and creators to connect on a deeper and more scaled level through live listening in the Spotify ecosystem. Spotify Live can now be found both as the stand-alone app and as a livestream function in the Spotify app alongsi
Slide 20: Outlook
OUTLOOK 20
Slide 21: Outlook for Q3'22
Outlook for Q3’22 The following forward-looking statements reflect Spotify’s expectations for Q3 2022 as of July 27, 2022 and are subject to substantial uncertainty. Total MAUs 450 million Implies the addition of approximately 17 million net new MAUs in the quarter Total Premium Subscribers 194 mill
Slide 22: 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 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 Six months ended June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Revenue 2,864 2,661 2,331 5,525 4,478 Cost of revenue 2,160 1,990 1,668 4,150 3,267 Gross profi
Slide 27: Consolidated statement of financial position
Consolidated statement of financial position (Unaudited) (in € millions) June 30, 2022 December 31, 2021 Assets Non-current assets Lease right-of-use assets 445 437 Property and equipment 373 372 Goodwill 1,111 894 126 89 Intangible assets Long term investments 720 916 84 77 Restricted cash and othe
Slide 28: Consolidated statement of cash flows
Consolidated statement of cash flows (Unaudited) (in € millions) Three months ended Six months ended June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Operating activities Net (loss)/income (125) 131 (20) 6 3 Adjustments to reconcile net (loss)/income to net cash flows Depreciat
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 Six months ended June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Basic (loss)/earnings per share Net (loss)/income attributable to owners
Slide 30: Reconciliation of IFRS to non-IFRS results: Constant currency revenue
Reconciliation of IFRS to non-IFRS results Revenue on a constant currency basis (Unaudited) (in € millions, except percentages) Three months ended Six months ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 IFRS revenue 2,864 2,331 5,525 4,478 Foreign exchange effect on 2022 revenue usi
Slide 31: Reconciliation of IFRS to non-IFRS results: Free Cash Flow
Reconciliation of IFRS to non-IFRS results Free Cash Flow (Unaudited) (in € millions) Six months ended June 30, 2022 June 30, 2021 Net cash flows from operating activities 76 119 Capital expenditures (15) (44) Change in restricted cash (2) — Free Cash Flow 59 75 Free Cash Flow (Unaudited) (in € mill
Slide 32: Reconciliation of IFRS to non-IFRS results: Adjusted gross margin
Reconciliation of IFRS to non-IFRS results Adjusted gross margin (Unaudited) (in € millions, except percentages) Three months ended Three months ended Three months ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Premium Ad-Supported Consolidated IFRS revenue
Slide 33: Reconciliation of IFRS to non-IFRS results: Operating expenses
Reconciliation of IFRS to non-IFRS results Operating expenses on a constant currency basis (Unaudited) (in € millions, except percentages) Three months ended June 30, 2022 June 30, 2021 IFRS Operating expenses 898 651 Foreign exchange effect on 2022 operating expenses using 2021 rates 63 Operating e
Slide 34: Appendix
APPENDIX 34
Slide 35: Supplement to Financial Statements
Supplement to Financial Statements MAUs and Subscriber reconciliation for Russia exit and March service outage ADJUSTED USERS AND SUBSCRIBERS Q1 2022 Q2 2022 Total Monthly Active Users ( MAUs ) 422 433 Total MAUs - Russia Only 5 -- Total MAUs - Service Outage 3 -- Total MAUs - Adjusted 414 433 Q/Q N