Financial Data and Key Metrics Changes - Monthly Active Users (MAU) grew by 3 million to 678 million, with net subscriber additions of 5 million, reaching a total of 268 million, up 12% year on year [21] - Total revenue was €4.2 billion, growing 15% year on year on a constant currency basis [21] - Premium revenue rose 16% year on year on a constant currency basis, driven by continued subscriber growth and ARPU gains [22] - Gross margin came in at 31.6%, surpassing guidance by approximately 10 basis points and expanding about 400 basis points year on year [23] - Free cash flow was €34 million in the quarter, driven by growth in operating income and improving net working capital [24] Business Line Data and Key Metrics Changes - The advertising business delivered currency neutral growth of 5% year on year, with over 10,000 advertisers leveraging new tools, representing a 21% year over year increase [22][19] - The Spotify Partner Program for video podcasters launched in January, expanding to nine new markets and resulting in users spending 44% more time with video content overall [13] - Audiobooks continued to expand in premium, rolling out to more regions and driving higher user and author engagement [14] Market Data and Key Metrics Changes - Emerging markets drove two-thirds of the subscriber outperformance, with Latin America and Asia Pacific showing especially strong growth [15] - Developed markets also saw solid growth, indicating that Spotify is gaining market share in these regions [15] Company Strategy and Development Direction - The company is focusing on delivering the best possible experience to users and creators, with a commitment to accelerate innovation in 2025, termed the year of accelerated execution [11] - The strategy includes maximizing catalog offerings and enhancing user engagement through new features and content [55] - The company aims to maintain a strong balance sheet while prioritizing internal growth opportunities that can drive attractive returns [72] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the broader macro environment's uncertainty but expressed confidence in Spotify's long-term growth trajectory [6][8] - The company expects a stronger second half of 2025, with MAU net additions anticipated to be within the range of the past four years [90] - Management emphasized that the underlying performance remains strong, with high engagement and retention rates [50] Other Important Information - The company ended the quarter with €8 billion in cash and short-term investments, indicating a strong financial position [26] - The company is closely monitoring market conditions to adapt proactively to any changes in the macroeconomic environment [26] Q&A Session Summary Question: 2025 outlook and gross margin expectations - The company expects Q4 2025 gross margin to be up year over year and anticipates MAU net adds to be within the range of the past four years without requiring higher marketing spend [28][29] Question: Super fan product details - The company is working on higher tiers around new offerings, which will open new opportunities for user engagement and monetization [30][31] Question: AI integration in product development - AI is being leveraged for personalization and internal productivity, with expectations for accelerated product development [39] Question: Economics of podcaster payouts - The $100 million payout to podcasters aligns with expectations, and engagement metrics are key KPIs to monitor [41][44] Question: Advertising business performance - The advertising business is seeing strong internal tailwinds, with a unified ad stack providing more options for advertisers [48] Question: Subscriber growth despite reduced marketing spend - The company is focusing on enhancing the value to price ratio, which has led to strong subscriber growth without increased marketing [50][51] Question: Video content strategy - The company is adding video content based on creator demand, with ongoing improvements to the TV experience [56][58] Question: Financial impact from rights renewals - All financial impacts from recent rights renewals are reflected in the financial numbers as per contractual agreements [60] Question: Audiobooks growth strategy - The company sees significant opportunities in improving the user experience and expanding non-English content for international growth [62] Question: Pricing opportunities - The company believes there is significant pricing opportunity in the future, with a focus on maintaining a strong value to price ratio [63][68] Question: Capital allocation priorities - The company aims to prioritize growth opportunities while considering shareholder returns as excess capacity rises [72] Question: Revenue growth targets - The company remains focused on increasing consumer value, which will drive growth, although the path may not be linear [73][75] Question: Near-term noise in the market - The company does not foresee any major implications from the current macro environment, maintaining confidence in long-term growth [82] Question: Video podcast consumption trends - There has been a 44% year over year growth in time spent with video content, particularly among Gen Z [84] Question: Monthly Active Users (MAU) growth challenges - The company anticipates a rebound in MAU growth in the second half of the year, driven by product improvements and marketing adjustments [90]

Spotify (SPOT) Q1 2025 Earnings Call April 29, 2025 01:09 PM ET Speaker0 Welcome to Spotify's First Quarter twenty twenty five Earnings Call and Webcast. All participants are in a listen only mode. As a reminder, this conference call is being recorded. I would now like to turn the call over to Brian Goldberg, Head of Investor Relations. Thank you. Please go ahead. Speaker1 Thanks, operator, and welcome to Spotify's first quarter twenty twenty five earnings conference call. Joining us today will be Daniel Ek ...

Q1 2025 Update April 29th, 2025 Table of Contents Executive Summary p.03 | Key Highlights | p.04 | | --- | --- | | Financial Summary | p.06 | | MAUs & Subscribers | p.13 | | Product & Platform | p.16 | | Outlook | p.19 | Financial Statements 2 p.22 Executive Summary We are pleased with our performance in Q1, as nearly all of our KPIs were in-line to ahead of guidance. The business added 3 million MAU during the quarter, in-line with our expectations for a seasonally small quarter, while Subscriber net addit ...

Subscriber Growth - Spotify's premium subscriber base increased by 5 million in Q1, a 12% year-over-year growth, totaling 268 million subscribers, marking the second-highest total ever and the highest net addition for a first quarter since 2020 [1] Financial Performance - The company reported a record-high quarterly operating income of €509 million (approximately $528 million), although this was below the guidance of €548 million ($625 million) [2] - Total revenue rose by 15% year-over-year to €4.2 billion ($4.8 billion) [2] - The operating income for the previous quarter was €477 million ($509.48 million) [3] Market Position and Competitive Landscape - Spotify continues to be a leading player in the music streaming industry, outperforming competitors like Apple Music and Amazon Music [4] - The company is expanding into video podcasts, with 330,000 shows available on the platform, and has launched the Spotify Partner Program, which paid out over $100 million to podcast creators in Q1 [4] Product Innovations - Spotify has introduced its AI Playlist feature to over 40 markets, including countries such as the Bahamas, Fiji, Ghana, Jamaica, Kenya, and Singapore [5]