Spotify Technology S.A.

Welcome to Spotify's fourth quarter 2022 earnings conference call and webcast. All participants are now listen only mode. If you require operator assistance at any time, please press star zero. 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, Mr. Goldberg.

Thanks, Operator, and welcome to Spotify's fourth quarter 2022 earnings conference call. Joining us today will be Daniel Ek, our CEO, and Paul Vogel, our CFO. We'll start with opening comments from Daniel and Paul, and afterwards, we'll 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 SpotifyEarningsQ422. 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've got 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 questions. Before I 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.

Thanks for joining us. We had a great Q4 and ended 2022 strongly. Our user and subscriber numbers continue to climb, showing the value of our investments in the platform over the past few years. We're now in an even stronger competitive position, and I'm confident in our future prospects. And I'll let Paul fill you in on more of the specific details. However, a notable call-out in the quarter was our eighth annual Wrapped campaign, which was a big contributor to our Q4 success. And we broke all sorts of records and reached several all-time highs with an increase of over 30% in user engagement. Wrapped was trending all over social media, but it wasn't just about Wrapped. 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 audiobooks being enjoyed by almost half a billion listeners. In 2021, we said that 2022 would be an investment year, and it was. 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. And the answer is no and yes. I still believe it was the right call to invest, and I would do it again. So for instance, in the last 12 months, we grew our users substantially, enhanced our capabilities, developed a better product, and brought more content to creators and users around the world. And we also made tremendous stride in setting Spotify apart from everyone else in our space. In addition, my expectation was never that these investments would have great impact in the short term, yet they have. But more importantly for our share owners, I fully expect that they will continue to pay dividends in the months and years to come. But things change, and the macro environment has changed significantly in the last year. And in hindsight, I probably got a little carried away and overinvested relative to the uncertainty we saw shaping up in the market. So we are shifting to focus on tightening our spend and becoming more efficient. This remains consistent with the plan we outlined at Investor Day, but you should expect us to execute on it with even greater intensity, given what I just said. However, to be clear, this doesn't mean we're changing our strategy. We will continue to work to build the platform of the future, and that will take investment in new opportunities that we outline like podcasts and audiobooks. 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. But going forward, we will do it with an intense focus on efficiency. And that marks a pretty big shift in how we will act. And to meet this objective, we are also rethinking how we operate. We've set up a new org structure that streamlines decision making and prioritizes speed and efficiency. 2023 marks a new chapter for us, but our commitment to achieving our goals remains the same. Now I'm really optimistic about the direction we're headed in and will continue to focus my efforts on guiding the long-term success of the company. And with that, I'll hand it over to Paul to go deeper into the numbers and then Brian will open it up to the Q&A.