So, net, net, I think we went from being almost nowhere four years ago to now being the leader in many markets around the world in this space. So far, the bears appear to be winning. And we've seen that time and time again that this close partnership generates material benefits for both companies over time. Increased publishing rates and a one-off change in accruals. However, given Spotify's rapid ascent to become the global leader in audio content and Ek's high inside ownership, I'm inclined to back him to execute and reclaim Spotify from the depths of "stock market purgatory". Earn your MBA and SM in engineering with this transformative two-year program. Surowe iorganiczne formy naszej biuterii kryj wsobie znaczenia, ktre pomog Cimanifestowa unikaln energi, si iniezaleno. It adds the benefit that it makes our business more defensible because now it is meaningfully contributing to our advertising story. Spotify has 400 million users, and its goal is to get to a billion. As Alex takes on responsibility as Chief Business Officer, how should we think about his priorities and leadership for content and advertising, how those might differ from Dawn's? And we had success with our holiday campaign, which we do every December and Wrapped was a huge success as well, sort of driving traffic to Spotify. So, think about, for instance, how we're working with our label partners, think about how we're working with merchandise and other things, too. So that's still the plan. And then there's the company that releases something that it knows needs work and then rapidly improves from there. We did all of that testing for years before we said, Okay, its worth us to roll it out globally.. I have no business relationship with any company whose stock is mentioned in this article. You may now disconnect. Before we begin, let me quickly cover the safe harbor. But going forward, we will do it with an intense focus on efficiency, and that marks a pretty big shift in how we will act. As such, if Spotify is able to acquire customers that are valuable in the long-term (i.e., have a high customer lifetime value), it makes sense to be more aggressive with S&M investments to gain market share and strengthen their MAU lead over competitors like Apple (AAPL) and Amazon (NASDAQ:AMZN). Do you expect any change to that conversion or to churn given the large MAU cohorts over the past couple of years? You're seeing a lot of Polish music being very impactful as well. In this article, I present my thoughts on Spotify's latest Q3 2022 results. Were there any noticeable benefits to subscribers from the rollout of Google user choice billing in the fourth quarter? Mokave tobiuteria rcznie robiona, biuteria artystyczna. Sienkiewicza 82/84 Non-degree programs for senior executives and high-potential managers. We're fully aware of what's going on globally. Podcasting was this business that, for 20 years, didnt change, said Vogel, a simple RSS feed. But Spotify thinks it can provide tailored recommendations just as it does with its music service to promote engagement and make podcasting an even better experience. In addition, its advertising component of the podcasting business is helping the margins grow over time.. Here are the highest-paid members of the mayors team, followed by the rest of his Cabinet (in alphabetical order): *Policy Director Kaohly Her won election to the Minnesota House in November. Please disable your ad-blocker and refresh. The main bear case for Spotify has always been that they will never be able to expand gross margins to reach their long-term goal of 40% recently outlined in their 2022 investor day. Vogel had no idea where Spotify was headed that day it went public, but he hoped it was somewhere exciting. Reported results were aided by a 600-basis point currency benefit. And as that happening, it is impacting our business. Growth in the quarter was lower than forecast due mainly to currency movements and to a lesser degree, lower marketing spending. Can you help us understand your thinking here? So, it wasn't just that we took audience from another platform, but we actually grew the pie meaningfully for podcasters. 2021 MIT Platform Report: new markets, green energy, Considering a platform strategy? WebPaul Vogel is Chief Financial Officer at Spotify Technology SA. No credit card required. And as people's music taste becoming more personalized, you're seeing two things happening. What to watch: Next quarter, Spotify expects its gross profit margins to continue to improve slightly to 25.5%, which should sit well with investors. If you have an ad-blocker enabled you may be blocked from proceeding. Bring a business perspective to your technical and quantitative expertise with a bachelors degree in management, business analytics, or finance. So, the answer is yes to 2022 being the peak drag from podcast. And any specific areas of the business to call out that were impacted more so than others? So, I think Q1 probably we expect more of the same. And I know some investors don't believe that we're serious about it, but hopefully, my remarks today shows that we are really, really focused on driving efficiency going forward. So I'd say at a high level, we still remain very confident with the margin profile and margin guidance we gave at the Investor Day. Until then, I'll likely pause adding to my position. Spotify Officially Adds Paul Vogel as a Director Ahead of Such gross margin weakness came despite another quarter of >100% YoY growth in total campaign volume for sponsored artist recommendations, which is a very high-margin revenue source. And therefore, the more likely it is to lead to positive business results for us long term. We'll be available on our website and also on the Spotify app under Spotify Earnings Call Replays. Theyre lessons other companies can draw on as they compete in the burgeoning market for platform services. Yes. Some of them have been working greatly, and you should expect us to double down on those. (All three companies offer competing ways for users to stream music.) Paul Vogel is new to the role of Spotify CFO, but not to Spotifyor to the relationship between finance and the tech/media industry. Combine an international MBA with a deep dive into management science. In short, the main bear case for Spotify has always been that while it may be a good "product", it is not a good "business" or "investment". Spotify (NYSE:SPOT) is the largest global audio streaming platform with 456m monthly active users (MAUs) and 195m premium subscribers. And there are certain shows that work really, really well for us, and there shows that didn't perform as we expected. "We want to make our platform the de facto platform for podcasts for Spotify users," Spotify's CFO Paul Vogel said on an investor call. It's always tough to know. If you have an ad-blocker enabled you may be blocked from proceeding. A full-time MBA program for mid-career leaders eager to dedicate one year of discovery for a lifetime of impact. Total monthly active users grew to 489 million in Q4. All right. Sometimes that is keeping the price low and grow the number of users on the platform. We're also forecasting EUR 3.1 billion in total revenue, a gross margin of roughly 25%, excluding severance charges and an operating loss of EUR 194 million with the latter reflecting EUR 35 million to EUR 45 million in severance charges within our operating expenses. Gross margin of 25.3% was above guidance by 80 basis points due primarily to lower podcast content spend, along with broad-based favorability in our core music business led by strength in Marketplace. CEO Daniel Ek and CFO Paul Vogel Break Down Q2 I am not receiving compensation for it (other than from Seeking Alpha). Sometimes it is increasing the revenue per user. Yes. He is Well, thank you, everyone, for joining the call. When do you expect them to be released? It's roughly 600 employees that were affected. 4 strategies for digital growth from Spotifys CFO | MIT Sloan Not the Paul Vogel you were looking for? Continued investments to build out their podcast/audiobook digital infrastructure. So, I just wanted to add that context that, that's still very much on the top line for us that you should expect music to be meaningfully improving with things like Marketplace playing an important role. Spotify announced its second-quarter The one addition I would probably just make is that it's generally been true over the entire existence at Spotify that the longer a person stays with us, the higher the likelihood is that they'll end up being a Premium subscriber over time. Okay. And three, do you still expect the consolidated gross margin to reach 30% within five years? And so, we're excited about user choice building. Paul Vogel is 47, he's been the Chief Financial Officer of Spotify Technology S.A since 2020. While Spotify's lack of consistent operating profitability is undeniably frustrating, I am not overly concerned for the following reasons: First, Spotify is in no danger of a capital raising with consistent positive free cash flow and a fortress balance sheet consisting of 3.7b cash, cash equivalents, and short-term investments. July 29, 2021. But as I mentioned before, we're thinking obviously how we can grow our business the best possible way. A rigorous, hands-on program that prepares adaptive problem solvers for premier finance careers. Year-over-year churn, though, was pretty consistent with where it was at this point last year. We have the same notion around podcasting. And as a result, now we have 5 million creators on Spotify, so a massive increase in the number of people who are creating podcasts, you being one of them. And I feel really, really good about our competitive differentiation. Okay. He confirmed that Spotifys annual podcasting revenue grew by more than 300% to We're definitely seeing people take up the offering but we're nowhere done from where we want to be and where we believe the category can be doing. We're seeing some encouraging signs. Yes, I think the most important thing here is to kind of go back on context. Is this an area of focus? Yes. And the usual way to do that is not to try to increase prices too early, but keep a competitive price that attracts the most amount of users onto the platform. State says changes needed. $50 k. $61.5 k. $73 k. $50,119. But things change, and the macro environment has changed significantly in the last year. Wybierzcie dla siebie unikatowe obrczki ipoczcie jewdowolne komplety. In contrast, Spotify has been relatively disciplined at controlling general and administrative (G&A) expenses, with a QoQ decline in G&A spend as a percentage of gross profit from Q2 2022 (24%) to Q3 2022 (21%). And as that's happening, their retention increases. It was broad-based by product. When Vogel joined Spotify in 2016, there were 1,500 employees. As the Chief Financial Officer of Spotify Technology S.A, the total compensation of Mr Vogel at Spotify Technology S.A is And what we've been going through has really been a multiyear approach that really culminated with what we presented to you, the community, at our Investor Day in June. Vogel said that a mistake hes seen people make in the media space is using old paradigms to understand where businesses and markets are heading. He spent nearly six years covering crime in the Dakota County courts before switching focus to the St. Paul mayor's office, city council, and all things neighborhood-related, from the city's churches to its parks and light rail. spotify usa inc. Joining us today will be Daniel Ek, our CEO; and Paul Vogel, our CFO. Please disable your ad-blocker and refresh. Thus, while investments in original/exclusive podcasts and to build out podcast infrastructure are a short-term drag on gross/operating margins, it is pleasing to see continued strength with podcast engagement amongst Spotify's base of MAUs. Looking ahead, we are pleased with our momentum into 2023. Overall, Q3 involved more of the same for Spotify. I think there's -- look, there's a number of factors that are going to -- that improve gross margin. We do sometimes 10, sometimes hundreds of those within quarters. And with that, I'll hand it over to Paul to go deeper into the numbers, and then Bryan will open it up to the Q&A. Can you help them understand why you believe in the investment to date, especially in the context of your recent management changes? I mean its early days on audio books. WebPaul Vogel Phone Number Found 5 phone numbers: View Paul's Email & Phone (It's Free) 5 free lookups per month. So, in Q4, we outperformed our expectations. Total Q3 revenue was 3.04b, which was up 6% QoQ and 21% YoY, but in FX neutral terms, total revenue only grew 12% YoY, Spotify's slowest rate of revenue growth in several years. That's kind of what I can say. Broken down by vertical, Spotify's premium gross margin was 28.0% (down from 29.1% in Q3 2021), while ad-supported gross margin was 1.8% (down from 10.5% in Q3 2021). While the company has historically had better revenue growth and better margins on the premium side, Vogel said, at least 60% of subscribers have come on board to Spotify by signing up first for a free subscription. To that end, Spotify continues to invest in its advertising business.