Spotify:Quarterly Results/2023 Q3: Difference between revisions

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 === Earnings Calls Notes ===
 See: [https://www.mindmeister.com/app/map/3007711030 Mindmap]
-* Management said they will continue to focus on efficiency eg in cloud and customer service.
+<ref>https://seekingalpha.com/article/4642913-spotify-technology-s-spot-q3-2023-earnings-call-transcript</ref>
-* They pointed out that the number of premium subscribers in North America grew in-line with expectations, and that the “decline” seen in the report is due to “rounding off”.
-* Music advertising is one of the areas they are diving into and which will contribute to revenue in future.
+==== User Growth ====
-* They expect margins to grow sequentially going forward.
-* They are seeing positive development in audiobooks and that audiobooks will result in margin gains in future as users upgrade to paid audiobooks after diminishing the 15 hours, though in Q4 it will be a small drag on margins.
+* Q3 was second largest quarter ever for MAU net addition
-* Audio ads is more expensive, but with AI (which they are experimenting on), they will be able to lower barrier to enter, though early days to see the results.
+* Well on the way for reaching more than 1 billion global users by 2030
+* On track to deliver 30 million subs, exceding initial expectations of 20m
+* 112 million MAU for all of 2023, which is nearly 60% above four-year historical trend and adding 30 million subscribers for the year, which is 12% above the historical trend.
+* Grew subscribers in North America in line with expectations, all regions performed well from a subscriber perspective and relative to expectations.
+==== Price increases ====
+* The price increase went well. Churn had never been that material, and it was similar to this go around. And  outperformed on the gross intake side, which is one of the reasons they outperformed on overall subs
+* Expect the price increase to be a positive mid-single-digit ARPU benefit to Q4 FX neutral
+* Is just 1 of the strategies for growth, but not the most used for now.
+==== Margins and Profitability ====
+* Operating expenses growth in the quarter was lower than forecast due mainly to lower-than-expected personnel and related costs as well as marketing spend.
+* Team is constantly finding new ways to bring more efficiencies out of the business.
+* Expecting to be profibablt going forward
+* In 2024, expect to see a continued improvement in gross margin trends and a continued improvement in operating income trends as well.
+* Podcasting should soon break even, and then become an additional driver to gross profit.
+==== Audiobooks ====
+* There will need to be innitial investments, but will not derail progress on gross margin, operating income or free cash flow
+* Premium only offer 15 hours, but there is an option to top up additonal hours after this limit.
+* Is still  very early days on the audiobook side, but encouraged with what they're seeing.
+==== Forecast ====
+* For q4 2023, forecasting a 300 basis point fx headwind. Excluding this effect, constant currency revenue will be closer to EUR3.8 billion, reflecting expectations for accelerating currency-neutral growth to 20%.
+* Acceleration in Q4  is aided by a full quarter benefit of the price increases announced in Q3.
+* Still will focus on delivering on value that the core business can still offer, and improving marketplace
+* March, event and audiobooks will not be meaninfull yet
+* Ads could hopefully be a driver too
+* Audio ads is more expensive, but with AI (which they are experimenting on), they will be able to lower barrier to enter, though early days to see the results
 == Estimates ==