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spk04: Let's go, Dazzlers. Oh, my God. What a great question. Camille shaking her head. Telling Camille, was that Damon and Hathaway? Oh, whoa. Oh, that's close enough. Y'all got to give me something. Here we go. This show's a little different. You'll love it. Season three, October 6th.
spk05: First session, case 63 for registration. Please tell me where you're coming from. I'm from the year 2062. You say you're coming from the future.
spk03: Throughout high school, Brandon was a misfit. Then, one day, out of the blue, one of the popular girls asked him to prom. Did you, like, just feel like saying, why the heck am I here? Like, was this a mistake? Yeah.
spk04: Yeah, I would have loved an answer to that question, but couldn't fathom saying it.
spk03: Fifteen years later, Brandon finds out. Why him? Join us for the season premiere of Heavyweight, out now. Listen for free on Spotify.
spk07: We're told that being fat is really unhealthy. But is that actually true? I think fat is pretty good. It's healthy fat. We dove into the surprising new science on whether being fat is bad. And the scientists, they got feisty. Your stuff is rubbish. It's ludicrous. It's obviously wrong. Like you're an idiot. So, is it possible to be fat and fit? To find out, listen to Science Versus, free on Spotify. That's Science VS.
spk06: Hello everyone, I'm voice actor Yoko Hikasa. This time, Spotify will start a new program on September 3rd. The title is Spotify Ani-Zone. Ladies and gentlemen, thank you for standing by.
spk00: And welcome to the Spotify Q3 2021 earnings call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session, and instructions will follow at that time. If you should require any assistance during this conference, please press star zero on your touchtone telephone. I would now like to hand the call over to your speaker for today, Brian Goldberg, Head of Investor Relations. Brian, the floor is yours.
spk01: Great. Thank you, and welcome to Spotify's third quarter 2021 earnings conference call. Joining us today will be Daniel Eck, our CEO, and Paul Vogel, our CFO. We'll start with opening comments from Daniel, and afterwards, Daniel and Paul will be happy to answer your questions. Questions can be submitted by going to slido.com, S-L-I-D-O.com, and using the code hashtag SpotifyEarningsQ321. Analysts can ask questions directly into Slido, and all participants can then vote on the questions they find the most relevant. We ask that you try to limit yourself to one to two questions, and to the extent you have follow-ups, we'll be happy to address them, time permitting. If for some reason you don't have access to Slido, you can email investorrelations at ir at spotify.com, and we'll add in your question. Before we begin, let me quickly cover the safe harbor. During this call, we'll be making certain forward-looking statements, including projections or estimates about the future performance of the company. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed on today's call, in our letter to shareholders, and in filings with the Securities and Exchange Commission. During this call, we'll also refer to certain non-IFRS financial measures. Reconciliations between our IFRS and non-IFRS financial measures can be found in our letter to shareholders, in the financial section of our investor relations website, and also furnished today on Form 6K. And with that, I'll turn it over to Daniel.
spk02: All right. Hi, everyone, and thank you so much for joining us. And I'll start by sharing what I hope you all saw in our shareholder letter. The business is doing really well, and I'm pleased that we continue to deliver across the areas that are fundamental to our growth and long-term strategy. We had a very strong quarter. I'll quickly speak to MEU before talking about a few longer-term trends that I'm really excited about. Importantly, as I indicated last quarter, we had started to see MAU strengthening in the last half of Q2, and I'm really pleased that this trend continued throughout Q3. I believe the shoppiness in the first half of the year was primarily due to COVID and is now largely behind us. All signs show that we're back to consistently delivering against our forecast, but we've also learned from the last two quarters and are responding faster to changes, most notably in key markets like India, where we're now seeing a nice recovery. That's all to say that as we head into what's historically our biggest quarter of the year, we're all hands on deck to make sure the positive trend continues. And I feel really good about where we stand across all of the other aspects of the business overall. And as you can see this quarter, our ads revenue continues to surpass even our own optimistic expectations. This, I think, clearly proves the potential for ads to be the second big revenue driver for the future of our business. Not only did we have our biggest quarter ever for ads in Q3, but 2021 will mark the first time we will surpass 1 billion euro in ad revenue. While this is a significant milestone, this business is accelerating with much more room to run. Excitement from advertisers for the podcast industry has increased substantially over the last year, and we're ahead of our plans for podcast monetization. Audio ads on the internet are now becoming a bigger part of advertisers' media mix overall. And to take advantage of this growing demand, we recently unveiled Spotify audience network enhancements for advertisers and added anchor creators to the mix. And this gives advertisers more opportunities to connect with listeners and enable podcast creators to earn from their work in new ways. This latest announcement is only one example of our focus on increasing the velocity across the business. In this case, unlocking more inventory as advertisers and creators alike are realizing the value of podcast ads. Looking long term on our product and our platform, which is where I tend to focus, my confidence in the opportunity still out there is unwavering. This is especially true when I think about how well we are positioned despite still being very much in the early days of this audio journey. A good reminder, linear radio still has a 46% share of audio listening in the U.S. alone, this despite consumption shifting steadily away from it. And this year, more than 60% of all audio ad spending will go to traditional radio. I think this clearly shows that we have plenty of room to grow both in listening time and in our effective monetization. And the U.S. is one of the most advanced markets, so internationally, there's even more growth ahead of us. And with that context in mind, I want to highlight a few areas of our platform strategy. And as a reminder, any improvements on our platform will ultimately help increase listeners, listening hours, and subsequently our effective monetization. So let's look at podcasting. We started our journey three years ago in podcasting with a catalog of about 185,000 podcasts, and we were really nowhere compared to the largest players in the industry. Today, we have 3.2 million podcasts on the platform, a growth rate of over 1,500%. But despite the fact that we're still a relatively new entrant, previous data indicated we have become the top platform for podcast consumption in 60 plus countries. And now, according to Edison Research and our own internal sources, we recently became the number one podcast platform US listeners use the most. Given the US represents the largest podcast market globally, I think this is quite significant. I am confident to say that we're a leader not only in podcasting.
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