Spotify User Growth (Spotify Q3 2022 Shareholder Deck). Spotify Did factors like geography or a listeners age influence who used it? And you can see that already today where there's lots of concerts from all the big vendors being available, and we'll add more and more of inventory. We'll be having more decision-making so that we can make decisions faster because that honestly is one of the biggest blocker at this point. And by all accounts, it was extremely successful, if not more successful than we even thought. And as a result, now we have 5 million creators on Spotify, so a massive increase in the number of people who are creating podcasts, you being one of them. And so, we're excited about user choice building. For the story behind the numbers, we tapped the experts to join this weeks episode of Spotify: For the Record. CEO Daniel Ek and CFO Paul Vogel sat down with Dustee Jenkins, Head of Global Communications, to discuss the results and what they mean for the future of the platform. Thanks, Rich. Spotify has struggled to gain traction in the public markets, falling 44% from their IPO price in April 2018 and 66% in 2022 alone. Yes. That's kind of what I can say. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. As Spotify continues to grow its subscriber base, the company is paying particular attention to engagement metrics, because the more often you come back to Spotify and the longer you stay, the higher your retentions going to be, Vogel said. Its limited literally to imagination and how big you think it could be., Read next:Digital transformation after the pandemic. We had a plan and a focus at the beginning of the year to really invest, particularly in some of our newer markets to grow there and make sure that we have the foothold that we wanted to have. You need to give people a reason to come to your service when the default service is going to be the easier option, all things being equal., Spotify, for example, recently launched a feature that allows users to see the lyrics to the songs theyre listening to. 90 318d, Administratorem danych osobowych zbieranych za porednictwem sklepu internetowego jest Sprzedawca (Jubilerka Pola Chrobot). I have no business relationship with any company whose stock is mentioned in this article. I don't think from a strategy point of view that it will differ all that much from Dawn's. And if you look compare to our other verticals, music and podcasting, we thought pretty much the same thing. Please disable your ad-blocker and refresh. The main bear case for Spotify has always been that they will never be able to expand gross margins to reach their long-term goal of 40% recently outlined in their 2022 investor day. Share. If not, does this give Spotify increased confidence to take price? So, we outperformed that EUR 200 million. Not the Paul Vogel you were looking for? These statements are based on current expectations and assumptions that are subject to risks and uncertainties. And some of it, we have to absorb the cost as we're testing. All right. A resident of Hamline-Midway, he is married to a Frogtown woman. I/we have a beneficial long position in the shares of SPOT either through stock ownership, options, or other derivatives. They're trying to engage more with that audience, and we're obviously trying to help them monetize that audience even better. So, for instance, if you look at many of the local geographies now, you're seeing a lot of take France as an example, you're seeing a lot of French music actually being very impactful in Poland. And to meet this objective, we are also rethinking how we operate. Spotify CFO Paul Vogel on earnings - CNBC I mean its early days on audio books. So, nothing has really changed when we look at the space and what the potential is, and now we're just heads down focused on executing. Spotify $73,192. Sometimes it is increasing our margin per user and sometimes it's all of the above. Spotify is known for its smart algorithms that create curated playlists for users based on what they already like to listen to. Indeed, I see several similarities between the plight of Spotify and Meta Platforms, in that the sharp drops in share price and investor pessimism are largely self-inflicted as the founders continue to make heavy long-term investments, despite weakening macroeconomic conditions. Our next question is going to come from Michael Morris on advertising. (All three companies offer competing ways for users to stream music.) I wrote this article myself, and it expresses my own opinions. While part of me admires Ek's courage to stay the course on his long-term strategy despite changing market conditions, another part of me is becoming increasingly frustrated with Ek constantly pushing back the timeline for meaningful gross and operating margin expansion. An interdisciplinary program that combines engineering, management, and design, leading to a masters degree in engineering and management. It is positive, though. He Tweets with manic intensity at @FrederickMelo. I would say, in general, any time we're growing MAUs, the way we are, it's always a really good sign of the business, the health of the business and the health of the future subscriber growth for Spotify as well. He came to the Pioneer Press in 2005 and brings a testy East Coast attitude to St. Paul beat reporting. So, the answer is yes to 2022 being the peak drag from podcast. And we also made tremendous strides in setting Spotify Park from everyone else in our space. Spotify So, I think the most thing if we kind of up level this is our priority is to grow revenue as fast as we possibly can. However, we continue to generate roughly $200 million in free cash flow on a trailing 12-month basis and we expect to be free cash flow positive for the full year of 2023. Before we begin, let me quickly cover the safe harbor. Other acquisitions by Spotify include Findaway, a digital audiobook distributor, as well as Greenroom, a live chat audio app similar to Clubhouse all of which leads to user growth, better engagement, more time spent, higher lifetime value, and thats sort of how we think about the business," Vogel said. We had a great Q4 and ended 2022 strongly. Is audio books as a category working? Obviously, on the MAU side, '22 was a real outlier in terms of how much we outperformed. Such R&D costs should naturally decrease once Spotify's recently launched products become more established and the heavy upfront product-related investments are complete. Spotify has 400 million users, and its goal is to get to a billion. Such investments have continued (or even accelerated in the case of Meta Platforms) despite substantial public pressure from investors/analysts to cut costs. Let's start with Q4. So inevitably, you should expect our hurdle rate for new investments to be higher. Next -- another question from Michael Morris. We finished the quarter with 205 million subscribers, 3 million ahead of guidance, thanks to broad-based strength across several regions, particularly Latin America. She requested a leave of absence from the mayors office from January to June to focus on the Legislative session. We want to have a billion users, Paul Vogel, Spotifys chief financial officer, told attendees at the 19 th annual MIT Sloan CFO Summit last month. And then we're going to holistically now look at the business rather than looking at things bit by bit. We're seeing some encouraging signs. And how has it impacted your thinking about new categories, some of those new categories you teased at the Investor Day? This argument assumes that Spotify will forever be beholden to powerful record labels like Universal Music Group. Thank you. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Demand for podcasts is also increasing, with the number of MAUs engaging with podcasts growing by the "substantial double-digits" YoY. Yes. Inventive. It's things that we think are going to drive -- improve engagement, improve users, improve subscribers. For example, large-cap tech peers which derive a large portion of their revenue from advertising also reported weaker-than-expected Q3 results, including Alphabet (GOOG) (GOOGL), Meta Platforms (NASDAQ:META), and Snapchat (NYSE:SNAP). July 29, 2021. So, we're encouraged because we think fundamentally that audio books has a massive opportunity and that there are very few consumers that are currently participating in the ecosystem. 2023 marks a new chapter for us, but our commitment to achieving our goals remains the same. Paul Vogel is the Chief Financial Officer at Spotify. And the usual way to do that is not to try to increase prices too early, but keep a competitive price that attracts the most amount of users onto the platform. Earn your masters degree in engineering and management. And so, to have both Gustav and Alex help me in the day-to-day in this much more complex business, I think, will materially mean that we'll have more brains thinking about these things. Spotify reported strong growth in MAUs and premium subscribers in Q3, comfortably beating their internal guidance. So, I think the big thing that I just want to highlight again is we mentioned, as Paul said before, that 2022 would be an investment year. So, we are shifting to focus on tightening our spend and becoming more efficient. So, it's tough to really know. Spotify Technology S.A. (NYSE:SPOT) Q4 2022 Results Conference Call January 31, 2023 8:00 AM ET. Paul Vogel is Head of Investor Relations at Spotify. That's been one of our -- things that we need to speed up when we look at sort of the internal feedback. Spotify filed its IPO as a direct listing in April 2018, at which point it was cash flow positive and valued at $29.5 billion. And that adds several benefits to Spotify. And podcast, do you still expect podcast to reach breakeven within several years? Spotify And that's going to conclude our Q&A session for today's call. But things change, and the macro environment has changed significantly in the last year. So obviously, we don't give 2022 guidance anymore. So that's our general approach. The join flow is better, giving users the choice on payment methods and how they want to work with us and purchase from us. Reported results were aided by a 600-basis point currency benefit. Do you believe this is happening on your platform? So, I'd say, look, at a high level, we've said this repeatedly for a while, any time you're seeing accelerating growth in MAU, that always tends to be very good for our business and lead to subscribers over time. Well, thank you, everyone, for joining the call. Podcast consumption hours in Q4 have nearly doubled since Q4 2019. Thank you for your participation. Search Others Named Paul Vogel Paul Vogel So, in Q4, we outperformed our expectations. Prior to Russias invasion of Ukraine, according to Vogel, Spotify was trending ahead of its Q1 guidance of adding a net 8 million total users, including 3 million paying customers. We've seen podcast MAU as a percent of our total MAU continue to increase. However, given Spotify's rapid ascent to become the global leader in audio content and Ek's high inside ownership, I'm inclined to back him to execute and reclaim Spotify from the depths of "stock market purgatory". So, we wanted to tackle this heads on. So, we expect that to get better in 2023 as well. We've got another question from Rich Greenfield on the product. Our next question is going to come from Justin Patterson. Grounded. Editor's note: This story has been updated to include quotes from Daniel Ek and Paul Vogel. Year-over-year churn, though, was pretty consistent with where it was at this point last year. Paul Vogel, Head of Investor Relations, Spotify - Topio Networks [Operator Instructions] As a reminder, this conference call is being recorded. A full-time MBA program for mid-career leaders eager to dedicate one year of discovery for a lifetime of impact. And obviously, the big sort of counter to that would be does it mean that you can sustain yourself or is it more one-hit wonders? So I'd say at a high level, we still remain very confident with the margin profile and margin guidance we gave at the Investor Day. "We want to make our platform the de facto platform for podcasts for Spotify users," Spotify's CFO Paul Vogel said on an investor call. A huge part of that, especially for the music audience is obviously touring. As Alex takes on responsibility as Chief Business Officer, how should we think about his priorities and leadership for content and advertising, how those might differ from Dawn's? And then there's the company that releases something that it knows needs work and then rapidly improves from there. 2021 MIT Platform Report: new markets, green energy, Considering a platform strategy? Total Q3 revenue was 3.04b, which was up 6% QoQ and 21% YoY, but in FX neutral terms, total revenue only grew 12% YoY, Spotify's slowest rate of revenue growth in several years. And so, when we talk about an investment year, some of that is part of what was going on. In the first quarter, Spotify beat gross margin expectations of 24.9% to reach 25.2%. And then you need to balance that, obviously, with having the ability to have sustainable artist careers on the back of that, too. And given the timing within quarters, we may see free cash flow turn negative in Q4, but we still expect to be free cash flow-positive for the year and moving forward. A joint program for mid-career professionals that integrates engineering and systems thinking. We do sometimes 10, sometimes hundreds of those within quarters. Next question from Rich Greenfield on audio books. And so, we feel good about that and where the tech is going, and then it's really going to somewhat depend on just how the macro rolls out over time. I'd like to add a bit more color on the quarter and then touch upon the broader performance of the business and our outlook. Essentially, Spotify is a lot more complex of a business than it was several years ago. We're going to continue to see Marketplace growth, which will help our music gross margin. I'll take this and feel free to chime in, Paul. Average annual salary was $55,001 and median As a result of the unpaid leave, her regular salary of $120,000 was reduced to $73,000 for 2019. Moving to operating expenses. But luckily for us, it hasn't impacted our numbers at all. This concludes today's conference call. And some of them, not surprisingly, haven't worked out. If you have an ad-blocker enabled you may be blocked from proceeding. Mam prawo dostpu do treci swoich danych i ich sprostowania, usunicia, ograniczenia przetwarzania, oraz prawo do przenoszenia danych na zasadach zawartych w polityce prywatnoci sklepu internetowego. So, we'll get some of the leverage on top of that investment in 2023, along with higher revenue growth and more gross profit dollars. Well, I mean, again, we have what I think is a pretty decent music discovery already, which works pretty well. And the management changes really had nothing to do with the change of strategy in podcasting. Gross margin and operating expenses are expected to improve throughout the year, as we have mentioned previously, while free cash flow is expected to be in line with historic averages. However, such a slowdown in ad-supported revenue is not isolated to Spotify but is rather a function of weakening Tworzymy jzmioci donatury ipierwotnej symboliki. Long term, I think it's absolutely a business model and market opportunity for Spotify, too. 4 strategies for digital growth from Spotify Pracownia Jubilerki And again, we feel that product has a lot of momentum behind it as well and expect good things in 2023 as well. Related Articles After six decades of arts education, founder of St. Paul A rigorous, hands-on program that prepares adaptive problem solvers for premier finance careers. All right. When Netflix was growing, people used to say, Well, how big can this company be? Vogel said. And this is true across the world, really at this point. So, we had really strong Marketplace growth overall in 2022. Please disable your ad-blocker and refresh. Spotify And I think that's a sign of maturity that you go for the growth first and then you seek the efficiency. Spotify CFO: Company could achieve profitability, 'If we wanted to' Our next question is going to come from Deepak on user choice billing. We're going to be more thoughtful about all of our spending into 2023. Our user and subscriber numbers continue to climb, showing the value of our investments in the platform over the past few years. If you need more lookups, subscriptions start at $39 USD/month. You had expectations for approximately EUR 200 million in Marketplace revenue for 2022.

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