Spotify(US:SPOT)2025-11-04 21:46User Metrics - As of September 30, 2025, the company reported 713 million monthly active users (MAUs), an increase of 11% from 640 million MAUs as of September 30, 2024[112]. - The number of Premium Subscribers reached 281 million as of September 30, 2025, reflecting a 12% year-over-year growth from 252 million in 2024[115]. - Ad-Supported MAUs increased to 446 million as of September 30, 2025, marking an 11% rise from 402 million in the previous year[117]. Revenue and Growth - For the three months ended September 30, 2025, total revenue increased by €284 million, or 7%, reaching €4,272 million, while for the nine months, it increased by €1,224 million, or 11%, totaling €12,655 million[132]. - Premium revenue for the three months ended September 30, 2025, increased by €310 million, or 9%, comprising 90% of total revenue, while for the nine months, it increased by €1,223 million, or 12%[133][134]. - Ad-Supported revenue for the three months ended September 30, 2025, decreased by €26 million, or 6%, comprising 10% of total revenue, while for the nine months, it increased by €1 million, or less than 1%[135][136]. Costs and Profitability - Total cost of revenue for the three months ended September 30, 2025, increased by €173 million, or 6%, totaling €2,921 million, while for the nine months, it increased by €583 million, or 7%, totaling €8,658 million[138]. - Premium cost of revenue for the three months ended September 30, 2025, increased by €219 million, or 9%, and as a percentage of Premium revenue, it increased from 66% to 67%[139]. - Ad-Supported cost of revenue for the three months ended September 30, 2025, decreased by €46 million, or 11%, and as a percentage of Ad-Supported revenue, it decreased from 87% to 82%[141]. - Gross profit for the three months ended September 30, 2025, increased by €111 million, or 9%, totaling €1,351 million, while for the nine months, it increased by €641 million, or 19%, totaling €3,997 million[145]. - Premium gross profit for the three months ended September 30, 2025, increased by €91 million, while Premium gross margin decreased from 34% to 33%[147]. - Ad-Supported gross profit increased by €20 million, with gross margin rising from 13% to 18% for the three months ended September 30, 2025, compared to the same period in 2024[149]. - For the nine months ended September 30, 2025, Ad-Supported gross profit rose by €81 million, and gross margin improved from 11% to 17%[150]. Investments and Expenses - The company invested heavily in research and development to enhance user engagement and customer satisfaction, which is expected to drive organic growth in Monthly Active Users (MAUs) and Premium Subscribers[128]. - Research and development costs decreased by €33 million, or 10%, for the three months ended September 30, 2025, primarily due to a €46 million reduction in social costs[151]. - Sales and marketing expenses increased by €17 million, or 5%, for the three months ended September 30, 2025, mainly due to a €22 million rise in advertising costs[153]. Financial Position - Free Cash Flow for the nine months ended September 30, 2025, was €2,040 million, up from €1,408 million in the same period of 2024[172]. - Cash and cash equivalents and short-term investments increased by €1,614 million, from €7,448 million as of December 31, 2024, to €9,062 million as of September 30, 2025[173]. - Net cash flows from operating activities increased by €659 million to €2,077 million for the nine months ended September 30, 2025, compared to €1,418 million for the same period in 2024[180][181]. - Free Cash Flow increased by €632 million to €2,040 million for the nine months ended September 30, 2025, primarily due to the increase in net cash flows from operating activities[184]. - Net cash flows used in investing activities increased by €868 million for the nine months ended September 30, 2025, primarily due to an increase in net cash outflows from purchases and sales of short-term investments[182]. - Net cash flows from financing activities decreased by €448 million for the nine months ended September 30, 2025, mainly due to a decrease in cash proceeds from the exercise of stock options[183]. Debt and Guarantees - As of September 30, 2025, the Company had outstanding indebtedness of €1,278 million related to Exchangeable Notes maturing on March 15, 2026[186]. - The Company is subject to minimum guarantees of €4,599 million, with €1,594 million due within one year[188]. - The Company expects to rely primarily on dividends from its subsidiaries to fund its financial obligations, which may be restricted by various factors[185]. Market Conditions - The company continues to monitor the macroeconomic environment, which remains uncertain due to inflation and geopolitical conflicts[108]. - The company anticipates that foreign exchange rate movements had a net unfavorable impact on total revenue, estimating an increase of approximately €178 million for the three months and €337 million for the nine months if rates had remained consistent with the previous year[137]. Shareholder Actions - The Company announced a share repurchase program of up to US$1.0 billion, with an additional US$1.0 billion approved on July 29, 2025, and a maximum value of shares that may yet be purchased under the program is approximately US$1,819 million as of September 30, 2025[176][177].