No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Apply to Production Worker and more! MOKAVE 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. And we're going to take the last question from Rich Greenfield on competition. Large increases in both research and development (R&D) and sales and marketing (S&M) costs over the past four quarters. So, for instance, in the last 12 months, we grew our users substantially, enhanced our capabilities, developed a better product and brought more content to creators and users around the world. And can you talk about the key drivers? Okay. So, we had kind of lowered expectations coming into Q4. Thanks, Paul. As Daniel mentioned, we are entering a new area with even more focus. 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? All participants are now in a listen-only mode. I imagine in five to 10 years we will have 10,000-plus employees, he says. WebPaul Vogel is Chief Financial Officer at Spotify Technology SA. I have no business relationship with any company whose stock is mentioned in this article. So first off, we have great relationships with all of our music partners and are in constant dialogues with them about their performance and our performance in all the markets around the world. Well, we've been making many investments. 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. The 6% was actual employees. And so, when we talk about an investment year, some of that is part of what was going on. WebPaul Vogels Post Paul Vogel Chief Financial Officer at Spotify 4d Despite the sharp 72% drop in Spotify's share price over the past 12 months, Ek remains committed to executing against his long-term vision for Spotify, despite short-term pressure from investors/analysts. And if you look compare to our other verticals, music and podcasting, we thought pretty much the same thing. (All three companies offer competing ways for users to stream music.) As a result of the unpaid leave, her regular salary of $120,000 was reduced to $73,000 for 2019. One of the big things we're seeing is users are asking us, help me find more great things to go watch. All right. So, we expect that to improve and improve throughout the year. Sometimes that is keeping the price low and grow the number of users on the platform. A rigorous, hands-on program that prepares adaptive problem solvers for premier finance careers. And then, Paul, maybe you can chime in on the detailed questions. But before it was rolled out, Spotify studied in which geographic markets it made the most sense to launch because what goes in North America and Europe can be different from Latin America and the rest of the world., Vogel said the lyrics feature was tested in multiple markets around the world to find out how important to users it was. Questions the company asked: Did it boost engagement? Spotify reported strong growth in MAUs and premium subscribers in Q3, comfortably beating their internal guidance. We're going to continue to see Marketplace growth, which will help our music gross margin. And we also then announced that 2023 would be a year where you see the reversal of some of those trends. All right. Hunting for a portfolio of 15-20 disruptive growth companies that can generate 15%+ IRRs over the next decade. Fourth, Daniel Ek acknowledged in the Q3 earnings call that the hurdle rate for new investments would increase going forward, so we should expect to see spending moderate in 2023: But I also want to reiterate that we're keenly aware that this is an uncertain time and the cost of capital has increased. WebIncludes base and annual incentives. As Spotify continues to grow its subscriber base, the company is paying particular attention to engagement metrics, because the more often you come back to Spotify and the longer you stay, the higher your retentions going to be, Vogel said. But again, given the outperformance in MAU this year, that's always a good harbinger for sub growth in the future. So, what costs are driving Spotify's declining operating margins? We've set up a new org structure that streamlines decision-making and prioritizes speed and efficiency. So, I feel really good about that. Spotify Technology S.A. has released its financial results for the first quarter of 2023 by posting an update on its Investor website. You need to give people a reason to come to your service when the default service is going to be the easier option, all things being equal., Spotify, for example, recently launched a feature that allows users to see the lyrics to the songs theyre listening to. This was a weak quarter for Spotify's revenue growth, which was masked by significant currency tailwinds. 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. We feel really good about the ad stack we're building. No credit card required. Entering text into the input field will update the search result below. If you need more lookups, subscriptions start at $39 USD/month. We want to have a billion users, Paul Vogel, Spotifys chief financial officer, told attendees at the 19th annual MIT Sloan CFO Summit last month. So, what does that mean future? [Operator Instructions] And our first question today is going to come from Matt Thornton on subscribers and pricing. All right. We've talked about the improvements in podcast gross margin as well as we expect that to get better throughout the year. Daniel Ek is Spotify's visionary Co-Founder/CEO who owns 7.3% of outstanding shares, equating to a multi-billion dollar stake in the business. I would just add in terms of just the subs outperformance in Q4, it was pretty broad-based. It's time for Spotify management to begin to "walk the walk" rather than "talk the talk". Do you believe this is happening on your platform? In this article, I present my thoughts on Spotify's latest Q3 2022 results. - Spotify CFO Paul Vogel, Q3 2022 Earnings Call. So, could you break out -- break down which investments are falling off that will drive the positive gross margin inflection in 2023 and 2024? And I think you'll see us be more efficient with our marketing spend into '23. Surowe iorganiczne formy naszej biuterii kryj wsobie znaczenia, ktre pomog Cimanifestowa unikaln energi, si iniezaleno. During this call, we'll also refer to certain non-IFRS financial measures. If you have an ad-blocker enabled you may be blocked from proceeding. Universal CEO recently called for a change to the streaming music business model, citing an increase in lower quality content, diverting economics away from artists. And what do you see as the path forward with your music label partners on this topic? Bears point to Spotify's lack of gross margin expansion since IPO due to high dependence on record labels like Universal Music Group (AMS:UMG), lack of consistent operating profitability, and a management team that cares little about representing shareholder interests. And then we're going to holistically now look at the business rather than looking at things bit by bit. Through intellectual rigor and experiential learning, this full-time, two-year MBA program develops leaders who make a difference in the world. We'll be available on our website and also on the Spotify app under Spotify Earnings Call Replays. BIUTERIA, KOLCZYKI rcznie robione, NOWOCI, BIUTERIA, NASZYJNIKI rcznie robione, NOWOCI, BIUTERIA, NOWOCI, PIERCIONKI rcznie robione. This argument assumes that Spotify will forever be beholden to powerful record labels like Universal Music Group. And thanks, everyone, for joining. Investors want Spotify to show consistent operating profits, but Spotify management continue to prioritise long-term investments in podcasts and audiobooks. The important part is what's pretty amazing with our Spotify story is that this is something that creates win-wins with our label partners too. In the first quarter, Spotify beat gross margin expectations of 24.9% to reach 25.2%. What are some of the concessions you're looking for from the labels? 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. It's always tough to know. So, the short answer is yes. So, I think Q1 probably we expect more of the same. My only addition to that would be, again, to note that much of the investments we've been making over these past few years that culminated in 2022 was making platform improvements. You mentioned in the deck an expectation for meaningful improvement in operating income in fiscal '23 and beyond. Ive got 10yrs experience. Bulls point to Spotify's demonstrated track record of growing MAUs and premium subscribers, rave customer reviews (4.8/5 on the App Store from 23.6m reviews), excellent brand recognition, industry-leading churn rates, strong balance sheet, and a visionary CEO (Daniel Ek) who some have argued single-handedly rescued the music industry from potential extinction. I have no business relationship with any company whose stock is mentioned in this article. 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%). Again, as Daniel mentioned, we invested a lot in 2022. That's been one of our -- things that we need to speed up when we look at sort of the internal feedback. Spotifys new hire for Chief Financial Officer comes It is positive, though. But luckily for us, it hasn't impacted our numbers at all. Next question from Doug Anmuth, users and subscriber growth in '23. We said a number of times that 2022 is going to be an investment year. It's hard for people to understand when they're looking at us because it looks like it's an inferior product or an inferior strategy. Sienkiewicza 82/84 Excellent user growth that beat guidance, strong headline revenue growth (with some weakness under the surface for their ad business when considering currency fluctuations), but plateauing gross margins and widening operating losses. 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). Another question from Matt Thornton on margins. Paul Vogel contact details: Email address: v***@spotify.com Phone number: (***) ***-**** Who is Paul Vogel? I wrote this article myself, and it expresses my own opinions. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. So, we wanted to tackle this heads on. Yes. We think Q1 will be the low point in terms of gross margin for the year, with gross margin improving throughout 2023. The join flow is better, giving users the choice on payment methods and how they want to work with us and purchase from us. We feel really good about some of the acquisitions we've made, obviously, at the high-level megaphone, but chartable and pod sites and our ability to improve measurement and attribution across all of advertising. WebPaul Vogel Phone Number Found 5 phone numbers: View Paul's Email & Phone (It's Free) 5 free lookups per month. And I think that's a sign of maturity that you go for the growth first and then you seek the efficiency. And how should we be thinking about the trajectory of Marketplace in '23? We think Q1 will be the low point in terms of gross margin for the year, with gross margin improving throughout 2023. [Operator Instructions]. Before we begin, let me quickly cover the safe harbor. Can you help us understand your thinking here? Paul Vogel then revealed precisely how not yet profitable podcasting was. Sober home operators oppose regulations in MN House bill. And then as the market matures, then obviously, it will shift more so that most of the revenue growth comes from price increases. What are some of the puts and takes here? So, we would always look at what's net beneficial to our business in growing the revenue and growing the profitability in each market we're in. Joining us today will be Daniel Ek, our CEO; and Paul Vogel, our CFO. So, we'll get some of the leverage on top of that investment in 2023, along with higher revenue growth and more gross profit dollars. Overall, Spotify management expect margins to improve from 2023 onwards, which provides some comfort for investors. Third, Spotify is currently in the midst of an "investment supercycle" with high R&D spend to build out new products (e.g., ad marketplace, live audio, podcasts, audiobooks), which should theoretically result in a better customer experience, leading to lower churn and higher pricing power. $50 k. $61.5 k. $73 k. $50,119. I mean its early days on audio books. 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. These charts show the average base salary (core compensation), as well as the average I can't comment on sort of individual negotiations with our rights partners. So, speed will come in having more decision-making and faster decision-making. Long term, I think it's absolutely a business model and market opportunity for Spotify, too. But our strategy is to be an open platform, and we want to enable as much as possible, and we are very partner-friendly when we're doing so. So, I think the most thing if we kind of up level this is our priority is to grow revenue as fast as we possibly can. Continued investments to build out their podcast/audiobook digital infrastructure. Please. Yes. It was up again in Q3. I'll just once again want to reiterate my confidence in the business now as we're entering the next phase. 1 global streaming audio player, and that means having everything, as much as you could possibly think [of], in audio.. A lot of the investments that we did in 2022 that were investments with no real sort of benefits to the revenue will start to hopefully bear fruit in '23 and beyond. four years ago, we entered into podcasting. It was pretty broad-based across most of the divisions within Spotify. And so, we feel good about that and where the tech is going, and then it's really going to somewhat depend on just how the macro rolls out over time. Some of them have been working greatly, and you should expect us to double down on those. Next question comes from Mario Lu on operating income. Mayor Melvin Carter entered office in 2018 pledging to make St. Pauls city leadership more racially and ethnically reflective of the city itself. 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. Despite consistent 20%+ MAU growth and a strong market leadership position, Spotify as an investment has attracted significant scepticism from investors. However, bears will be licking their lips at guidance for gross margins to further decline to 24.5% and for operating losses to widen to negative 300m, largely due to the same factors as in Q3 (slowdown in ad-supported revenue, heavy product investments, and currency fluctuations). Indeed, I see several similarities between the plight of Spotify and Meta Platforms, in that the sharp drops in share price and investor pessimism are largely self-inflicted as the founders continue to make heavy long-term investments, despite weakening macroeconomic conditions. Next -- another question from Michael Morris. Well, thank you, everyone, for joining the call. 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. 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. And I'm really optimistic about the direction we're headed in, and we'll continue to focus my efforts on guiding the long-term success of the company. Do you still expect 2022 to have been the peak drag from podcasts? It exceeded those expectations pretty nicely. I would say, in general, I think we're just overall, very excited about the opportunity. Other acquisitions by Spotify include Findaway, a digital audiobook distributor, as well as Greenroom, a live chat audio app similar to Clubhouse all of which leads to user growth, better engagement, more time spent, higher lifetime value, and thats sort of how we think about the business," Vogel said. A joint program for mid-career professionals that integrates engineering and systems thinking. Polityka prywatnoci zawiera pen informacj na temat przetwarzania danych przez administratora wraz z prawami przysugujcymi osobie, ktrej dane dotycz. Next question is going to come from Doug Anmuth on gross margin. Demand for podcasts is also increasing, with the number of MAUs engaging with podcasts growing by the "substantial double-digits" YoY. This remains consistent with the plan we outlined at Investor Day, but you should expect us to execute on it with even greater intensity given what I just said. As such, we expect another quarter of decelerating growth in Q4, but we continue to remain confident in the long-term potential of the [ad-supported] business. Pracownia Jubilerki It expects to add another 15 million monthly active users and 7 million net new paid subscribers. LeBron James is about to face Stephen Curry in the postseason for the sixth time. There's the company that waits until it gets things perfect the first time and then it tries to launch something that's perfect. 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. And just to level set on context. For throughout the existence of Spotify, we have always heard of competitors, and it was always the sort of big scary wolf, whether it was Apple or Amazon in the past, et cetera. Admittedly, those were lowered expectations. There was outperformance in pretty much every region. While I remain a committed long-term shareholder (and have continued to average down throughout 2022), my patience is beginning to wear thin. Does Spotify need to figure out music discovery knowing that TikTok appears to be ramping up to launch a music subscription service in the U.S. and Europe later this year? So, marketing was under Alex preview previously, but not advertising and not content. spotify usa inc. But we feel pretty good about the improvements we made in the platform already. Inventive. - Spotify CEO Daniel Ek, Q3 2022 Earnings Call. WebIn a equity funding round in 2015, Spotify was valued at $8.5 billion. Thank you for your participation. You typically see MAU to Premium subscriber conversion in the 12 to 18-month range. Since then, the Swedish company has watched its number of subscribers tick past 400 million as it expands into podcasting, live audio, and audio books. Spotify Technology S.A. (NYSE:SPOT) Q4 2022 Results Conference Call January 31, 2023 8:00 AM ET. We haven't given a timeline on that. But the trend is the same, which is the longer they stay, the more likely they are to convert. So we've seen really strong trends in general across all of podcasting. Since then, the Swedish company has watched its number of subscribers tick past 400 million as it expands into podcasting, live audio, and audio books. We think it's going to reduce friction and improve conversion over time. And with that, I'll hand things back to Bryan for Q&A. If you have an ad-blocker enabled you may be blocked from proceeding. And the other change is that unlike in the early areas of streaming, we're seeing a notable increase in local repertoire. But things change, and the macro environment has changed significantly in the last year. So even with the strong growth, we're not seeing any uptick in churn at all. Is audio books as a category working? Thanks, Daniel, and thanks, everyone, for joining us. Thanks, Rich. I am not receiving compensation for it (other than from Seeking Alpha). I would say, in general, any time we're growing MAUs, the way we are, it's always a really good sign of the business, the health of the business and the health of the future subscriber growth for Spotify as well. Vogel, who was interviewed byCharles Kane,a senior lecturer in Global Economics and Management at MIT Sloan, described how Spotify experimented with its service offerings before settling on a freemium subscription model. All right. Another question for Ben Black on ticketing. leadership position, Spotify as an investment has attracted significant scepticism from investors. Spotifys revenue was lighter than what analysts had expected for its second quarter earnings report. It's not that we can't execute on the ground. And we took the medium and pretty much have grown overall globally now the audience by a huge margin to what was true four years ago. And therefore, the more likely it is to lead to positive business results for us long term. So, it was broad-based globally. Unfortunately for shareholders, Spotify missed gross margin expectations for Q3, reporting a gross margin of 24.7%, well below their internal guidance of 25.2%. 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. And that's a constant dialogue that we're having with our label partners. And any specific areas of the business to call out that were impacted more so than others? Yes. Our next question is going to come from Justin Patterson. I would say, first thing is I think you can expect to see a meaningful improvement in the operating loss in '23 relative to '22. There are 15 older and 11 younger executives at Spotify Technology S.A. And we also made tremendous strides in setting Spotify Park from everyone else in our space. So, if we can be a partner to creators and help them sell more of their tickets, that is a meaningful increase to many artists' livelihood, which is great and something we're focused on. So, nothing has really changed when we look at the space and what the potential is, and now we're just heads down focused on executing. Gross margin and operating expenses are expected to improve throughout the year, as we have mentioned previously, while free cash flow is expected to be in line with historic averages. Essentially, Spotify is a lot more complex of a business than it was several years ago. During this call, we'll be making certain forward-looking statements, including projections or estimates about the future performance of the company. So that's still the plan. 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. This lack of consistent operating profitability is clearly testing the patience of some investors, particularly after Daniel Ek's recent guidance for 20% long-term operating margins at their 2022 investor day. If not, does this give Spotify increased confidence to take price? And are you seeing any conversion uplift? Now it's perhaps YouTube and TikTok, et cetera. Theyre lessons other companies can draw on as they compete in the burgeoning market for platform services. You may now disconnect. Sometimes it is increasing the revenue per user. For example, large-cap tech peers which derive a large portion of their revenue from advertising also reported weaker-than-expected Q3 results, including Alphabet (GOOG) (GOOGL), Meta Platforms (NASDAQ:META), and Snapchat (NYSE:SNAP). And that is a big shift, but it is also what we said during the Investor Day in June. Although around 85m of this operating loss was due to currency fluctuations, it is worth noting that in the prior corresponding period (Q3 2021), Spotify generated an operating profit of 75m (3.0% operating margin). And by all accounts, it was extremely successful, if not more successful than we even thought. Okay. And I'll let Paul fill in on more of the specific details. However, this was 200 basis points less than forecast. And then last point I would just add is to say that structurally, as the revenue mix shifts to more and more non-music content, so both podcasting but also audiobooks, et cetera, those gross margins in those categories is going to be significantly higher than the ones we've had in the music business, too. Netflix, which had never existed before, was often compared to HBO, which turned out to be an inaccurate comparison, Vogel said. 90 318d, Administratorem danych osobowych zbieranych za porednictwem sklepu internetowego jest Sprzedawca (Jubilerka Pola Chrobot). And you can see that already today where there's lots of concerts from all the big vendors being available, and we'll add more and more of inventory. So, when we look at a market, there's generally two strategies we can do that. WebPaul Vogel. WebHi All, recently got an offer from Spotify for a senior program manager role based in London. Importantly, Spotify We had strength, family plan and Duo plan. Travel the world to capture moments and beautiful photos. spotify technology sa. And how far forward do you have insight into demand trends? However, to be clear, this doesn't mean we're changing our strategy. Can you help them understand why you believe in the investment to date, especially in the context of your recent management changes? I think we've done pretty well. The number of artists that are mattering for users are increasing materially. How is this thing going to win podcasting these many years ago when we announced that and yet now four years later, we're the leader in that space. However, such a slowdown in ad-supported revenue is not isolated to Spotify but is rather a function of weakening We had a plan and a focus at the beginning of the year to really invest, particularly in some of our newer markets to grow there and make sure that we have the foothold that we wanted to have. Spotifys own subscriber figures continue to climb. We don't always talk about them, some of the things that come out 6, 9, 12 months later. What do you think? These statements are based on current expectations and assumptions that are subject to risks and uncertainties. A non-degree, customizable program for mid-career professionals. He reminded analysts Spotify decided to proactively reduce its hiring growth rate by 25% in the third quarter, which Billboard reported on June 15. And in light of our recent news on cost and staff reductions, I'm sure some of you are wondering if we believe that, that investment was a mistake. Doesnt seem very competitive compared to other big tech players. When combined with our increased focus on speed and efficiency, we are confident in our ability to continue our double-digit top line trajectory in conjunction with improvements in profitability. And during 2023, you'll see a lot of new things roll out in the audio book category from Spotify. Can you share detail on investments that have impacted Premium gross margin? Zachcamy do zapoznania si z polityk przed wyraeniem zgody. However, again, the primary reason why we did this reorg was to drive speed and drive more efficiency. And we've seen that time and time again that this close partnership generates material benefits for both companies over time. Overall, Q4 guidance implies more of the same for Spotify. We see a double-sided win-win here, which long term will translate into business opportunity. But I would mostly say that most of what we're seeing is quite encouraging because of all the response that we're seeing from artists around the world and their ability to grow their audience. Okay. Now there are more than 6,000. Until then, I'll likely pause adding to my position. I'm from Doug Anmuth on subscribers. They -- if Spotify does well in the market, it generally increases the revenues for the labels as well. Yes. We've got a follow-up question. Spotify has struggled to gain traction in the public markets, falling 44% from their IPO price in April 2018 and 66% in 2022 alone. But with both all the improvements we've been making in music, but also with the addition of podcasting and audio books, it is a much more resilient consumer experience. We've grown from 100 million users to almost 400 million users over a six-year period of time, Vogel said.

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