Spotify Technology S.A.

Good morning. My name is Julianne and I will be your conference operator today. At this time, I would like to welcome everyone to Spotify's Q2 2023 earnings call and webcast. If you require operator assistance at any time, please press star zero. I would now like to turn the call over to Brian Goldberg, head of investor relations. Thank you. You may begin your conference.

Thank you, operator, and welcome to Spotify's second quarter 2023 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 SpotifyEarningsQ223. Analysts can ask questions directly into Slido, and all participants can then vote on the questions they find the most relevant. 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 shareholder deck, 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 shareholder deck. in the financial section of our investor relations website and also furnished today on form 6K. And with that, I'm going to turn the call over to Daniel.

All right. Hey, everyone, and thank you all for joining us. I hope you all had a chance to review our shareholder deck. And as you can see, it was a very strong quarter. We beat our own expectations again across both MEU and subs. And in addition, it's really gratifying to see the outperformance and growth that continues to come from markets all over the world. So let me share some more context on the growth this quarter before we go into what it ultimately means for the business. So this quarter netted the highest MAU growth in Spotify's history. And as a point of comparison, our growth this quarter was 36 million compared to Q2 of 2022, where we saw MAU growth of 19 million. And this re-acceleration is significant and shows that our investments in adding podcasts and improving our platform and user experience are paying off nicely. I've talked before about the fact that the biggest driver of our subscriber growth comes from users who start on our ad-supported service. It is a really powerful funnel where the more our users discover and engage, the more they're willing to pay for an enhanced experience. And with six quarters of MAU outperformance, we are capitalizing on this momentum and it's proving to have a meaningful effect, helping us achieve 10 million net new subscribers this quarter. 3 million more than we originally anticipated. So now let's talk about revenue growth. There are three ways for us to drive revenue growth. We can grow our users, we can create new business with new revenue streams, and we can increase revenue per user. Our preference among them is to focus on growing the overall number of consumers on our platform, as this gives us scale advantages and retains optionality for the future. However, we've also been clear that there will come a time when price increases become a more important tool in the toolbox. And to that end, as most of you are now aware, yesterday we announced broad price increases across more than 50 markets, including most of Europe and North America. And we've carefully awaited this decision, but we felt the timing was right. We've expanded value to price significantly by meaningfully improving our content offering, and we continue to enhance the user experience and lower churn. And over the past few years, we have learned a lot as we've conducted over 50 price increases already. And this experience, coupled with our strong offering, put Spotify in an excellent position to make this move. And while this won't impact revenue per user much up until the end of Q3, we expect it to have a meaningful impact on Q4 and beyond. And finally, we continue to make progress on improving efficiency across the company. As Paul will explain, we have taken several actions to further streamline our operations and reduce costs, which we largely outlined in Q1. These moves position us to become a much stronger business in the future. Despite making these changes in an effort to create more efficiency, we have still managed to increase the overall velocity of experiments and new improvements. And this gives me a lot of confidence. So looking back at Spotify, the lesson we have learned is the daily progress, even if faint, is more important than the occasional clash of brilliance we've had. Therefore, I believe that the speed of iteration is perhaps the ultimate leading indicator of our long-term success. And with that, I'll turn it over to Paul for more detail behind the numbers, and then Brian will open it up for our Q&A.