Spotify Technology S.A.

Good morning and welcome to Spotify's third quarter 2023 earnings call and webcast. All participants are in a 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.

Thanks, Operator, and welcome to Spotify's third 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 SpotifyEarningsQ323. 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 can 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'll turn it over to Daniel.

All right. Hey, everyone, and thank you so much for joining us. I hope you've had the opportunity to review our shareholder deck. Bottom line, it's a really exciting time at Spotify, and I'm super pleased at how the business is performing. It was a truly stellar quarter and one that clearly illustrates that we're making great progress against the goals that we laid out for you at our 2022 Investor Day. Q3 was our second largest quarter ever for MAU Net Edition. And as we look ahead to the end of the year, you'll also see that we're forecasting to hit another big milestone, reaching more than 600 million monthly active users at the end of the year. This puts us well on our way to reaching more than 1 billion global users by 2030. And to put that number into context, 15 years ago this month, Spotify went live in France, Finland, Norway, Spain, Sweden, and the UK. It's been a wild ride. Next, let's turn to the strength of our subscriber growth. We walked into 2023 thinking we would do just over 20 million in net subscriber ads for the full year, but we're actually on track to deliver 30 million, which is a significant beat from where we thought we would be. In fact, this will be the second biggest full year gain in net subs additions since going public. This momentum is especially significant when you put it in the context of the price increases that went into effect in Q3. And as we previously shared, because of our confidence in our product and our ever-expanding content offering, we felt the timing was right to raise prices across more than 50 markets. I know some of you wondered how we'd weather these increases, so I'm really pleased to report that this went as well as we'd hoped, even modestly exceeding our expectations. All of this sustained growth is a testament to the exceptional value Spotify continues to deliver globally. And with our new focus on operational efficiencies, we managed to achieve this with reduced marketing costs. The essence of our business model is to deliver unparalleled value to our user base through an ever-improving consumer and creator experience. This is coupled with every now and then expanding our ecosystem through new verticals to deliver even more value. And this, of course, nicely segues into the groundbreaking audiobooks offering for premium subscribers that we announced a few weeks ago. So not only will our expansion into this category supercharge the growth of the audiobooks format, but it also will drive engagement and reduced churn, which further enhances our value proposition. And this, of course, gives us more flexibility for our business. And while it's still too early to see the impact in our numbers, initial signs from subscribers in the UK and Australia are incredibly positive as we bring them more content to discover. In the first two weeks since launch, premium subs in these two markets are loving the breadth of titles and have already listened to over 28% of the catalog. They're flocking to fiction, memoirs, sci-fi, and fantasy, and I can't wait to see what US subscribers gravitate towards when we launch there soon. In terms of how all of this flows down to the underlying fundamentals of the business, including, of course, revenue and gross margin, I'll turn it over to Paul to provide more detail, and then Brian will open it up for Q&A.