Spotify Technology S.A.

question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I would like to turn the conference over to Brian Goldberg, Head of Investor Relations. Please go ahead.

Thanks, Operator, and welcome to Spotify's first quarter 2026 earnings conference call. Joining us today will be our co-CEOs, Alex Nordstrom and Gustav Soderstrom, and our CFO, Christian Luiga. We'll start with opening comments from the team, and afterwards we'll be happy to answer your questions. We will be taking questions today via Slido. Questions can be submitted by going to slido.com. Thank you. 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 differ materially 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 Alex.

Thank you, Brian. Hey, everyone, and thank you for joining us. 2026 is off to a strong start with performance reflecting solid execution, healthy growth, and the kind of engagement trends that give Gustav, myself, and the team confidence in building Spotify for the future. In Q1, we saw results that were in line or better across the board. We surpassed 760 million MAU, delivered on the subscriber growth we aim to achieve, and we saw healthy engagement from existing users, reactivations, and new users alike. Since the global rollout of our more personalized free experience, users in key markets like the U.S. are now listening and watching more days per month. Now, for a business as established as ours, did I mention, by the way, that we're celebrating 20 years this month? This is an exciting development, and I'll share more about why in just a moment. And we also netted our second highest gross margin ever. All that reinforces this confidence in sustained user and subscriber growth, low churn, and then also continued progress on revenue and margin. Now, for over two decades, we have worked hard to forge strong relationships with our industry partners and the artists and the creators that we support. You've watched these relationships evolve in the last 20 years, but we have never been in a better position to innovate and to grow thanks to the progress we're making together. So the trust that we have built is rooted in our collective desire to deliver results and expand the overall opportunity. We will have some new things to share on that front soon. And we just released our annual report on the health and growth of the industry. It's worth noting that Spotify remains the only platform offering this level of visibility into how the music industry actually works. Loud and clear showed that in 2025, we paid out a record $11 billion plus to rights holders while continuing to outpace the growth of others. And year over year, we expect that outperformance to continue. Now, on top of the streaming success, there's no doubt that artists, songwriters, musicians, and fans are just always seeking stronger connections. Song DNA and About the Song were introduced this quarter to pull back the curtain on the remarkable talent behind our favorite tracks and offer more insights into a song. But we didn't stop there. Live experiences are one of the most impactful ways for artists and fans to connect. So this winter, we took Spotify's most-streamed global artist, Bad Bunny, to Tokyo to perform in Asia for the first time in front of some of his biggest superfans. And then we turned around and broadcast that iconic moment to the world. This went beyond a concert. It was a real opportunity to amplify culture. Now all of this drives retention, so let me take a minute to just explain how we think about retention. Importantly, it acts as a proxy for how users value their time on Spotify. Now we look at many metrics, but the three that drive retention are more days in a month, more devices or contexts, and more content types or verticals. I've already told you we've been growing the days users spend with us each month. Engagement really is the lifeblood of Spotify, and I've been super excited to see this expand over the years and now too. Engaging with us then on more devices and also across our three content types just compounds this. This is how we grow the lifetime value of a user. Users who engage in this way, they stay longer or perhaps never leave. These three levers are rooted in our personalization efforts and act to reinforce one another. And AI just takes this to a whole new level. Essentially, we're unlocking your Spotify, your way for three quarters of a billion users around the world. Yesterday's announcement around fitness is a natural extension of this strategy. Spotify is already a trusted resource for wellness and fitness. Nearly 70% of premium users work out monthly, and our users have created more than 150 million workout-centered playlists, with many also turning to prompted playlists for support. So to meet this need more directly, we are launching a fitness hub on Spotify. And as we just announced, this hub features Peloton's premium subscriber content and an ad-free experience. And of course, this content will be a very strong complement to what has already been working, including content like Yoga with Cassandra, Jordan Yeo, and Chloe Ting. I know we continue to talk about our ads business as a work in progress, but the key point is that a year and a half of rebuilding, the foundation is now in place. Brands have always valued Spotify for its high user engagement, its beloved brand, and its high-quality content. But the market shifted, with advertisers now favoring biddable buying. We had to evolve to capture that TAM. So we rebuilt our stack end-to-end. Now, while this creates some short-term pressure, it unlocks a much larger opportunity. We are making solid progress. Today, biddable represents more than a third of ad revenue, and it's growing quickly. So with biddable expanding and also our active advertisers growing, coupled with improvements in our measurement and performance, we can now innovate in new ways the old stack never allowed. This finally lets us better capture the value of our audience. This is exactly how we wanted to start the year of raising ambition. We're now growing at scale, generating significant cash, and reinvesting to capture the opportunities that matter the most. What you are now seeing is the beginning of a much larger next chapter, and we're excited to go deeper on that at our upcoming Investor Day with you all. With that, I'll hand over to Gustav.