Spotify Technology S.A.

Good day and welcome to Spotify's second quarter 2025 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.

All right, thanks, operator, and welcome to Spotify's second quarter 2025 earnings conference call. Joining us today will be Daniel Ek, our CEO, Alex Nordstrom, our co-president and chief business officer, Gustav Soderstrom, our co-president and chief product and technology officer, and Christian Luiga, our CFO. We'll start with opening comments from the team, 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 SpotifyEarningsQ225. 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 the call over to Daniel.

All right. Hey everyone, and welcome to our Q2 earnings call. Overall, it was a solid quarter, especially when you look at our strong user growth across both subs and MEU. In fact, looking at the first half of 2025, subs net ads grew more than 30% versus the first half of 24. This quarter also marked a huge milestone for us as we hit over 100 million subscribers in Europe, our largest region, and it was our second highest Q2 for MEU Net Additions. User engagement also continues to strengthen, and this clearly demonstrates that the enhancements we made to both expand our content and improve our product are having the intended impact on our business. People come to Spotify and they stay on Spotify. And by constantly evolving, we create more and more value for the almost 700 million people using our platform. And this value not only benefits users, but it's attracting more people to streaming. And as a result, it also boosted the industries of music and podcasts and audiobooks. However, as I look at our progress, the one area that hasn't yet met our expectations is our ads business. We've simply been moving too slowly and it's taken longer than expected to see the improvements we initiated to take hold. It's really an execution challenge, not a problem with the strategy. And while I'm unhappy with where we are today, I remain confident in the ambitions we laid out for this business. And we're working quickly to ensure we're on the right path. And we are seeing some promising signs in our programmatic business, which I think will set us up nicely for 26. Alex and Christian will share more details on that shortly. As you also look at the underlying fundamentals of the business, this year is largely playing out as we expected. But in the spirit of transparency, you'll see a few places in our Q3 forecast where we probably am a little bit lighter than you may have anticipated. So let me talk about that. First, big picture. The business is solid and our model holds up. And I feel really good about where we stand and how consumers view Spotify. We still expect 2025 to be a standout year for Spotify. And this quarter brings us up one step closer to that goal of a billion subscribers. And looking ahead, we'll keep pushing boundaries through innovation, bringing even more value to users and creators. And this, of course, expands the overall Spotify network as we build a larger, more vibrant platform that will benefit everyone, where fans gain access to more of what they love and creators will have a global audience to reach. But let me also take a step back to remind you how we run Spotify. our approach has always been and will continue to be the focus on creating lifetime value rather than optimizing for quarter-to-quarter performance. Lifetime value is such a powerful metric because it inherently captures the balance and trade-offs between chasing short-term opportunities and driving long-term strategic initiatives. It really acknowledges that not every decision will yield immediate returns and that our progress is not always linear. Many of the initiatives driving today's strong user and subscriber growth were started several quarters or sometimes even years ago. And the exact timing of when these efforts flow into tangible results can vary. Sometimes that's within our control and sometimes not. But the most important takeaway for you all is that we don't make decisions to achieve specific short-term quarterly outcomes. But zooming out, we are very well positioned and I feel very good about our business. And with that, I'll hand it over to Alex.