As you move beyond the 2022 investment year, do you still expect gross margin to expand in 2023? And how has it impacted your thinking about new categories, some of those new categories you teased at the Investor Day? The 6% was actual employees. Next question from Doug Anmuth, users and subscriber growth in '23. And the second strategy would be to increase the revenue per user that we already have on the platform. We see a double-sided win-win here, which long term will translate into business opportunity. spotify usa inc. spotify technology. And thanks, everyone, for joining. Okay. 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. Yes. Could you give us an update on your ticketing business? Despite consistent 20%+ MAU growth and a strong market leadership position, Spotify as an investment has attracted significant scepticism from investors. Open. Netflix, which had never existed before, was often compared to HBO, which turned out to be an inaccurate comparison, Vogel said. Okay. But our strategy is to be an open platform, and we want to enable as much as possible, and we are very partner-friendly when we're doing so. And that will be a big improvement from prior org setups. And then as the market matures, then obviously, it will shift more so that most of the revenue growth comes from price increases. Indeed, Spotify trades at comfortably their lowest EV/LTM revenue multiple (1.1x) since their IPO, reflecting investor scepticism around their business model. And when I look at the totality of what we've done, one thing that stands out to me, and it is that it's not always linear. All right. 1 global streaming audio player, and that means having everything, as much as you could possibly think [of], in audio.. 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. Questions can be submitted by going to slido.com, S-L-I-D-O.com and using the code #SpotifyEarningsQ422. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. However, we'll need to wait until next quarter for concrete guidance on margins. I would now like to turn the call over to Bryan Goldberg, Head of Investor Relations. I publish additional articles on my substack:https://jordanmartenstyn.substack.com/Feel free to reach out on Twitter to collaborate and discuss ideas! And what are the reasons, if any, Spot would not take price? So, think about, for instance, how we're working with our label partners, think about how we're working with merchandise and other things, too. During his presentation at the investor conference, Vogel said economic uncertainty has yet to have much of an impact on Spotify. So, we are feeling good about the momentum exiting 2022. So, we expect that to get better in 2023 as well. Find contact details for 700 million professionals. That's been one of our -- things that we need to speed up when we look at sort of the internal feedback. And with respect to churn, we don't obviously give those numbers out. Melvin Carters Cabinet is most diverse in St. leadership position, Spotify as an investment has attracted significant scepticism from investors. Bring a business perspective to your technical and quantitative expertise with a bachelors degree in management, business analytics, or finance. 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. Thanks, Daniel, and thanks, everyone, for joining us. So, we had kind of lowered expectations coming into Q4. Please. Admittedly, those were lowered expectations. There's the company that waits until it gets things perfect the first time and then it tries to launch something that's perfect. It's always tough to know. And if you look compare to our other verticals, music and podcasting, we thought pretty much the same thing. In short, the main bear case for Spotify has always been that while it may be a good "product", it is not a good "business" or "investment". Analyst at a VC fund and Masters/PhD student in Clinical Psychology based out of Sydney, Australia. Do you believe this is happening on your platform? The join flow is better, giving users the choice on payment methods and how they want to work with us and purchase from us. Let's start with Q4. So, we outperformed that EUR 200 million. Our next question is going to come from Justin Patterson. Obviously, on the MAU side, '22 was a real outlier in terms of how much we outperformed. As such, Ek remains confident that revenue attributed to podcasts and audiobooks should have materially gross margins at scale than music-related revenue: And as we've said before, this heavy investment that we've done on the podcasting side is going to reverse in 2023 as it starts moderating. 2023 marks a new chapter for us, but our commitment to achieving our goals remains the same. But I would mostly say that most of what we're seeing is quite encouraging because of all the response that we're seeing from artists around the world and their ability to grow their audience. Thus, while investments in original/exclusive podcasts and to build out podcast infrastructure are a short-term drag on gross/operating margins, it is pleasing to see continued strength with podcast engagement amongst Spotify's base of MAUs. Please disable your ad-blocker and refresh. Combine an international MBA with a deep dive into management science. He is spotify usa inc. Turning to gross margin. I am not receiving compensation for it (other than from Seeking Alpha). Now it's perhaps YouTube and TikTok, et cetera. So, by the end of the year, we had more than 100 million tracks on our platform and more than 5 million podcasts and more than 300,000 audio books being enjoyed by almost 0.5 billion listeners. Now that said, of course, we're always looking at how we can make that better. Overall, Q3 involved more of the same for Spotify. Sometimes that is keeping the price low and grow the number of users on the platform. This was a weak quarter for Spotify's revenue growth, which was masked by significant currency tailwinds. Bears point to Spotify's lack of gross margin expansion since IPO due to high dependence on record labels like Universal Music Group (AMS:UMG), lack of consistent operating profitability, and a management team that cares little about representing shareholder interests. Now what you're probably asking underneath all of that is that it's been a drag on the gross margin side. And then, Paul, maybe you can chime in on the detailed questions. And we broke out the various verticals where you would see that music have been making steady improvements, but obviously, our podcasting business had been a drag to our gross margin profile. And how should we be thinking about the business model and the market opportunity? And I don't have anything specific to announce at this point, but we are constantly discussing with our rights holder partners around various price increases that we would be doing. It's time for Spotify management to begin to "walk the walk" rather than "talk the talk". So, it wasn't just that we took audience from another platform, but we actually grew the pie meaningfully for podcasters. So that's still the plan. And obviously, I look forward to sharing more on Stream On, sort of wink-wink around all the updates that we're planning throughout the year as well that I think will mean a lot for both music and podcasting and beyond. So, what you probably have seen is one of those experiments. Click to share on Facebook (Opens in new window), Click to share on Reddit (Opens in new window), Click to share on Twitter (Opens in new window), Click to email a link to a friend (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to share on Pinterest (Opens in new window), Click to share on Tumblr (Opens in new window), Submit to Stumbleupon (Opens in new window), Melvin Carters Cabinet is most diverse in St. Paul history. Spotifys foray into podcasting with its purchases of Gimlet and Anchor was a bit risky at the time but is now paying off, given that theres been so little innovation in podcasting, Vogel said. Spotifys freemium model provides dual benefits to the company. 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. It was up again in Q3. To that end, Spotify continues to invest in its advertising business. Read our Ideas Made to Matter. And that's the plan we're tracking consistently against. As a result of the unpaid leave, her regular salary of $120,000 was reduced to $73,000 for 2019. This was 10 million ahead of guidance, up 33 million quarter-over-quarter and the largest Q4 net additions in our history. It exceeded those expectations pretty nicely. Our view is, why shouldn't it be Spotify?" Heres how the music streaming service and other digital businesses can expand. Average annual salary was $55,001 and median Spotify is known for its smart algorithms that create curated playlists for users based on what they already like to listen to. The number of artists that are mattering for users are increasing materially. All right. Moreover, free cash flow is projected to become negative on a one-off basis in Q4 due to the timing associated with cash receipts between quarters. Spotifys new hire for Chief Financial Officer comes WebPaul Vogel, Spotify CFO, joins 'Closing Bell' to discuss the company's latest quarter and how his business differs from Netflix. Still early days in terms of how it's impacted at this point. Exactly when we break even, we haven't said yet, but we feel like we're on a good path, and we feel like we are in a good position right now to have that speed and efficiency that we want to have in 2023. So, there's a number of things that go on there. But as I mentioned before, we're thinking obviously how we can grow our business the best possible way. That's kind of what I can say. All right. This lack of consistent operating profitability is clearly testing the patience of some investors, particularly after Daniel Ek's recent guidance for 20% long-term operating margins at their 2022 investor day. If for some reason you don't have access to Slido, you can e-mail Investor Relations at ir@spotify.com, and we'll add in your question. The mission of the MIT Sloan School of Management is to develop principled, innovative leaders who improve the world and to generate ideas that advance management practice. So far, the bears appear to be winning. This marks a notable slowdown from growth rates reported over the previous four quarters and is a testament to a challenging global macroeconomic environment, leading both consumers and businesses to "tighten their belts". Sienkiewicza 82/84 As such, we expect another quarter of decelerating growth in Q4, but we continue to remain confident in the long-term potential of the [ad-supported] business. spotify. Hey, everyone and happy new year and thanks for joining us. And I know some investors don't believe that we're serious about it, but hopefully, my remarks today shows that we are really, really focused on driving efficiency going forward. And if anything, thanks to our position in users and subs, this should allow us to both increase revenue per user over time as well as improve our stickiness with consumers even more. Paul Vogel then revealed precisely how not yet profitable podcasting was. We -- so are looking closely at open headcount to see which of those we want to backfill and which of those we will also eliminate sort of, as we've mentioned a number of times as we try and be more efficient with deploying capital and employees moving forward. I would say, in general, I think we're just overall, very excited about the opportunity. I think what we said in my outset is we expect really strong growth. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Spotifys revenue was lighter than what analysts had expected for its second quarter earnings report. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Thanks, Rich. 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. And we also made tremendous strides in setting Spotify Park from everyone else in our space. Can you help us understand your thinking here? So, we don't go through all of them. And what is the projected path to contribution? So, if you kind of take a step back and you look at sort of just advertising in Q4 overall, it's definitely continued to be very up and down. Wyraenie zgody jest dobrowolne. And in light of our recent news on cost and staff reductions, I'm sure some of you are wondering if we believe that, that investment was a mistake. So first off, we have great relationships with all of our music partners and are in constant dialogues with them about their performance and our performance in all the markets around the world. So, while reported revenue was a touch below forecast, our organic growth on a currency-neutral basis modestly outperformed due primarily to advertising. A special opportunity for partner and affiliate schools only. We want to have a billion users, Paul Vogel, Spotifys chief financial officer, told attendees at the 19th annual MIT Sloan CFO Summit last month. If you need more lookups, subscriptions start at $39 USD/month. However, again, the primary reason why we did this reorg was to drive speed and drive more efficiency. So, I think Q1 probably we expect more of the same. I wrote this article myself, and it expresses my own opinions. We had strength, family plan and Duo plan. We feel good about the guidance for Q1 and how we're trending. Spotify's Q4 guidance for MAUs and premium subscribers was strong, forecasting 479m MAUs (+5% QoQ; +18% YoY) and 202m premium subscribers (+4% QoQ; +12% YoY). 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We want to be the And to meet this objective, we are also rethinking how we operate. We actually outperformed those by about EUR 50 million or so, plus or minus. If you have an ad-blocker enabled you may be blocked from proceeding. He confirmed that Spotifys annual podcasting revenue grew by more than 300% to So, the answer is yes to 2022 being the peak drag from podcast. Today, Do you expect any change to that conversion or to churn given the large MAU cohorts over the past couple of years? So obviously, we don't give 2022 guidance anymore. Bulls point to Spotify's demonstrated track record of growing MAUs and premium subscribers, rave customer reviews (4.8/5 on the App Store from 23.6m reviews), excellent brand recognition, industry-leading churn rates, strong balance sheet, and a visionary CEO (Daniel Ek) who some have argued single-handedly rescued the music industry from potential extinction. WebPaul Vogel is Chief Financial Officer at Spotify Technology SA. So, in Q4, we outperformed our expectations. Yes, I think the most important thing here is to kind of go back on context. [Operator Instructions]. And then we're going to holistically now look at the business rather than looking at things bit by bit. Spotify Gross Margins (Spotify Q3 2022 Shareholder Deck). Sober home operators oppose regulations in MN House bill. As a result of the unpaid leave, her regular salary of $120,000 was reduced to $73,000 for 2019. [Operator Instructions] As a reminder, this conference call is being recorded. Obviously, you can do the math. So, speed will come in having more decision-making and faster decision-making. So, I think the -- there is a lot more artists that are mattering now than perhaps ever before. We did all of that testing for years before we said, Okay, its worth us to roll it out globally.. 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. And that's a constant dialogue that we're having with our label partners. So that's still the plan. Analysts can ask questions directly into Slido, and all participants can then vote on the questions they find the most relevant. And as that's happening, their retention increases. Given many of the adjustments we made at the start of 2023, including our decision to reduce our workforce by 6%, we see our operating expenses growing slower with a material improvement in our operating loss compared with 2022. One of those strategies would be to grow the number of people that we can attract to join our platform. We've got time for one to two more questions. And we're going to take the last question from Rich Greenfield on competition. I do think you'll see '23 being -- we'll be more efficient with our marketing spend into 2023. And since we're not committed to rolling that out, I don't really have much of a sort of comment, but to say that overall, we're committed to creating the best audio experience for consumers and creators in the world. On the subscriber front, we expect to add about 2 million net subscribers, bringing total subscribers to 207 million. Investors want Spotify to show consistent operating profits, but Spotify management continue to prioritise long-term investments in podcasts and audiobooks. 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. We want to be the No. Next question from Benjamin Black on Marketplace. Good morning, and welcome to Spotify's Fourth Quarter 2022 Earnings Conference Call and Webcast. Its limited literally to imagination and how big you think it could be., Read next:Digital transformation after the pandemic. Well, we do a lot of experiments on the product side in many different areas. All right. Paul Vogel, Spotfiy CFO, joins Closing Bell to discuss. Indeed, Ek's central thesis for heavily investing to build a multi-product platform is that newer products (e.g., podcasts and audiobooks) do not have the same artificial gross margin constraints as their premium music revenue. 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. Despite the sharp 72% drop in Spotify's share price over the past 12 months, Ek remains committed to executing against his long-term vision for Spotify, despite short-term pressure from investors/analysts. Our three biggest competitors [are] Apple, Google, Amazon, Vogel said.