Spotify Technology S.A.

Good afternoon and welcome to Spotify's third quarter 2024 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 2024 earnings conference call. Joining us today will be Daniel Ek, our CEO, and Christian Luiga, our CFO. We'll start with opening comments from Daniel and Christian, 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 SpotifyEarningsQ324. 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'll turn it over to Daniel.

Alright, thanks Brian, and hey everyone, and thanks for joining us. So we're in LA this week to spend time with creators, and over the next few days we'll have a couple of announcements that I'm sure will be of interest to you related to our expansion of video on the platform, so more to come on that. But I want to start this call by welcoming our new CFO, Christian Luiga. I know some of you have already met him, and I hope the rest of you have the opportunity to do so soon. Christian brings incredible expertise and proven leadership to Spotify, and I'm grateful to have the benefit of his track record. I also wanted to take a moment to thank Ben Kung for the fantastic job he's done as interim CFO. It's been seamless, which is a huge testament to all that he's brought to the role. As you can see, there's a lot of positives this quarter. Q3 is another standout in what you've heard me refer to as the year of monetization, and we're on track for our first full year of profitability. We outperformed on both subs and MEU, revenues were in line, and we had significant beats on gross margin and operating income. We also had another sequential and all-time record quarter of free cash flow. Back at our 2022 investor day, we set clear goals for Spotify's growth, and this quarter marks a key point where we successfully achieved and even surpassed those targets, doing so slightly ahead of schedule. And I think this demonstrates what we've been saying over the past year. Spotify is not just a great product, but well on its way to become a great business. A big thanks to our team for their hard work and dedication in making this vision a reality. Over the past few years, we've continuously modulated our time and resources between focusing on growth and optimizing for profitability. This approach led to our record year in 2023 for MEU and premium editions. However, as the macro environment shifted, we made the difficult but necessary decision to adjust and focus on our efforts on cost efficiency. And we did this while continuing to transform our business, which included expanding into audiobooks in Europe, launching new subscription tiers and bringing more video onto the platform, just to name a few. And today's results demonstrate what we've consistently seen, the importance of finding the right balance between growth and reinvestment. so as we head into the year i'm sure you're asking what does this all mean for q4 and beyond we will close out q4 just as we started the year laser focused on monetization and the underlying fundamentals of our business looking at our forecast we expect to make further progress across all of our key metrics which sets us up with plenty of runway for growth and profitability expansion in the years to come But make no mistake, we're not here to merely optimize for today. I am as energized as I've ever been about the current landscape of technology. What's unfolding in AI with all of its knock-on effects is both thrilling and humbling. Moments like this don't come often. They're inflection points where you can either let the opportunity slip by or you can seize it and press forward with conviction. We're choosing the latter, fully committed, heads down and building for a future full of possibility. So as you think about Spotify in 2025 and beyond, picture a company that operates with the same discipline management you've seen this year, but one that also has the ambition to seize the opportunities presented by what's happening in technology. In the near term, I see potential for transformative shifts in music discovery and new innovative ways to connect artists and fans like never before. All great stuff for the music industry, which will drive further growth across our core business. And just as we successfully entered the audiobook space, we're committed to making the targeted investment that also expands Spotify into new areas, enhance the platform and deepen the value we bring to users. And this relentless focus on consistently delivering exceptional value well beyond the price a user pays for Spotify is how we drive sustainable growth for all stakeholders across our entire ecosystem. So to conclude, our commitment to the long-term goals we shared at Investor Day remains unwavering, but our journey will, as always, be defined by bold innovation and relentless pursuit of what's next. And with that, I'm going to turn it over to Christian to share his perspective, and then he'll provide more details into the numbers.