SPOTIFY TECHNOLOGY S.A. Q1 2023 Update
April 25th, 2023
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Table of Contents
Executive Summary | p.03 |
Key Highlights | p.04 |
Financial Summary | p.06 |
MAUs & Subscribers | p.13 |
Product & Platform | p.16 |
Outlookp.22
Financial Statements | p.25 | 2 2 |
Executive Summary
The strength we saw exiting 2022 continued into 2023, as nearly all of our Q1 KPIs surpassed expectations. MAU net additions of 26 million were 15 million above guidance, our highest Q1 ever and the fifth quarter in a row of accelerating Y/Y growth. Subscriber net additions of 5 million also reflected a material uptick vs. the prior year trend and were 3 million above guidance. Revenue growth was slightly below our expectations due to macro-related variability in our advertising business. However, Gross Margin exceeded guidance by 30 bps. The Operating Loss was also better, aided by lower marketing spend, and the business generated €57 million in Free Cash Flow.
Overall, we are encouraged by the strong start to 2023.
USER & FINANCIAL SUMMARY | Q1 2022 | Q4 2022 | Q1 2023 | Y/Y | Q/Q |
USERS (M) | |||||
Total Monthly Active Users ("MAUs") | 422 | 489 | 515 | 22% | 5% |
Premium Subscribers | 182 | 205 | 210 | 15% | 2% |
Ad-Supported MAUs | 252 | 295 | 317 | 26% | 7% |
FINANCIALS (€M) | |||||
Premium | 2,379 | 2,717 | 2,713 | 14% | 0% |
Ad-Supported | 282 | 449 | 329 | 17% | -27% |
Total Revenue | 2,661 | 3,166 | 3,042 | 14% | -4% |
Gross Profit | 671 | 801 | 766 | 14% | -4% |
Gross Margin | 25.2% | 25.3% | 25.2% | -- | -- |
Operating (Loss)/Income | (6) | (231) | (156) | -- | -- |
Operating Margin | (0.2%) | (7.3%) | (5.1%) | -- | -- |
Net Cash Flows From Operating Activities | 37 | (70) | 59 | -- | -- |
Free Cash Flow¹ | 22 | (73) | 57 | -- | -- |
- Free Cash Flow is a non-IFRS measure. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information.
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Key Highlights
Record high Q1 MAU growth | 14% Y/Y Revenue growth and |
of 26 million net additions | 25.2% Gross Margin |
Multiple updates to the Spotify experience unveiled at Stream On
- MAUs grew 22% Y/Y to 515 million, 15 million above guidance. Net additions of 26 million represented our largest ever Q1 growth and second largest quarterly net addition performance in our history
- Broad-basedMAU outperformance driven by higher reactivations, improved retention and marketing efficiencies
- Premium Subscribers grew 15% Y/Y to 210 million, 3 million above guidance, aided by top-of-funnel strength
- Total Revenue grew 14% Y/Y to €3.0 billion
- Premium Revenue grew 14% Y/Y to €2.7 billion
- Ad-SupportedRevenue grew 17% Y/Y to €329 million
- Gross Margin finished above guidance at 25.2%, primarily as a result of favorability in Other Cost of Revenue¹
- Launched the beta version of AI DJ to users in North America, strengthening our efforts in personalization
- Unveiled a new, dynamic and interactive foreground experience that makes the discovery of new music, podcast and audiobook content faster, easier and more engaging than ever before
- Announced several new tools and features for creators, including Showcase, Spotify Clips, Countdown Pages, Spotify for Podcasters and more
1 Other Cost of Revenue includes streaming delivery costs, payment fees, customer service and other content costs. | 4 |
Key Highlights: Actuals vs. Guidance
Users
Financials
Results | |
Monthly Active Users (M) | Above |
Premium Subscribers (M) | Above |
Results | |
Total Revenue (€B) | Below |
Gross Margin | Above |
Operating (Loss)/Income (€M) | Above |
Q1 2023 Actuals | Guidance |
515 | 500 |
210 | 207 |
Q1 2023 Actuals | Guidance |
€3.0 | €3.1 |
25.2% | 24.9% |
(€ 156) | (€ 194) |
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Disclaimer
Spotify Technology SA published this content on 25 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2023 13:10:04 UTC.
