So, I think the big thing that I just want to highlight again is we mentioned, as Paul said before, that 2022 would be an investment year. At this point, we don't see any reason why any of our historical trends would change. Can you help us understand your thinking here? And if anything, thanks to our position in users and subs, this should allow us to both increase revenue per user over time as well as improve our stickiness with consumers even more. Dane s lub mog by przetwarzane w celach oraz na podstawach wskazanych szczegowo w polityce prywatnoci. During this call, we'll also refer to certain non-IFRS financial measures. ul. And now we're going to have to live up to that. St. Paul Mayor Melvin Carter's staff and how much they're paid And the second strategy would be to increase the revenue per user that we already have on the platform. And yes, we still believe our consolidated gross margins can reach 30% in five years. And I'll let Paul fill in on more of the specific details. It's always tough to know. And we realized, again, as I mentioned in my comments around audio books that this was a nascent space that was growing, albeit still was under consumed to what we believe the potential was in the industry. Wrapped was trending all over social media, but it wasn't just about Wrapped. They -- if Spotify does well in the market, it generally increases the revenues for the labels as well. I am not receiving compensation for it (other than from Seeking Alpha). Mam prawo dostpu do treci swoich danych i ich sprostowania, usunicia, ograniczenia przetwarzania, oraz prawo do przenoszenia danych na zasadach zawartych w polityce prywatnoci sklepu internetowego. We've got another question from Rich Greenfield on the product. Spotify offered certain US staffers between October 2020 and September 2022 annual base salaries ranging from $75,000 to $369,500 across about 180 different roles, according to the data. Related Articles After six decades of arts education, founder of St. Paul Earn your MBA and SM in engineering with this transformative two-year program. Our next question is going to come from Michael Morris on music economics. Reported results were aided by a 600-basis point currency benefit. 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. A special opportunity for partner and affiliate schools only. Indeed, Ek's central thesis for heavily investing to build a multi-product platform is that newer products (e.g., podcasts and audiobooks) do not have the same artificial gross margin constraints as their premium music revenue. When Vogel joined Spotify in 2016, there were 1,500 employees. 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. Entering text into the input field will update the search result below. So inevitably, you should expect our hurdle rate for new investments to be higher. Okay. And I think you're seeing a little bit of both happening in the music industry at present moment. Smart. And obviously, the big sort of counter to that would be does it mean that you can sustain yourself or is it more one-hit wonders? 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. Non-degree programs for senior executives and high-potential managers. So that's still the plan. And I'm going to turn it now back over to Daniel for some closing remarks. When combined with our better gross profit, our operating loss was ahead of guidance by EUR 69 million. You mentioned in the deck an expectation for meaningful improvement in operating income in fiscal '23 and beyond. In Q3, Spotify reported 20% YoY growth in total MAUs from 381m to 456m (vs. guidance of 450m) and 13% YoY growth in premium subscribers from 172m to 195m (vs. guidance of 194m). - Spotify CEO Daniel Ek, Q3 2022 Earnings Call. Spotify Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Paul Vogel Net Worth (2023) | wallmine But our creators are trying to grow their audience on Spotify. Sober home operators oppose regulations in MN House bill. I would say, in general, I think we're just overall, very excited about the opportunity. [Operator Instructions] And our first question today is going to come from Matt Thornton on subscribers and pricing. I think some of these trends are very powerful and very good, I think, for consumers with more choice and more artists making their way. 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). As we previewed last quarter, free cash flow was negative in Q4 due primarily to timing shifts around certain payments. So, we outperformed that EUR 200 million. Today, the book market is worth $140 billion with audiobooks just a small fraction of that, he noted. We've set up a new org structure that streamlines decision-making and prioritizes speed and efficiency. So again, country mix changes, maturity of those market changes and so on. All right. We try to draw these linear dots, but that's not how the world works. This marks a notable slowdown from growth rates reported over the previous four quarters and is a testament to a challenging global macroeconomic environment, leading both consumers and businesses to "tighten their belts". And as that happening, it is impacting our business. It was broad-based by product. Our revenue grew 18% year-on-year to approximately EUR 3.2 billion in the quarter. And some of it, we have to absorb the cost as we're testing. And how has it impacted your thinking about new categories, some of those new categories you teased at the Investor Day? Analyst at a VC fund and Masters/PhD student in Clinical Psychology based out of Sydney, Australia. Turning to gross margin. Year-over-year churn, though, was pretty consistent with where it was at this point last year. Okay. Given many of the adjustments we made at the start of 2023, including our decision to reduce our workforce by 6%, we see our operating expenses growing slower with a material improvement in our operating loss compared with 2022. Spotify finds new CFO in Paul Vogel - RouteNote Blog Polityka prywatnoci zawiera pen informacj na temat przetwarzania danych przez administratora wraz z prawami przysugujcymi osobie, ktrej dane dotycz. Another question from Matt Thornton on margins. We said a number of times that 2022 is going to be an investment year. Kolekcja Symbols toukon wstron pierwotnej symboliki ijej znaczenia dla czowieka. Well, thank you, everyone, for joining the call. 2021 MIT Platform Report: new markets, green energy, Considering a platform strategy? State says changes needed. Overall, Spotify management expect margins to improve from 2023 onwards, which provides some comfort for investors. I still believe it was the right call to invest, and I would do it again. So, I'd say, look, at a high level, we've said this repeatedly for a while, any time you're seeing accelerating growth in MAU, that always tends to be very good for our business and lead to subscribers over time. A huge part of that, especially for the music audience is obviously touring. We see a double-sided win-win here, which long term will translate into business opportunity. 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. And what do you see as the path forward with your music label partners on this topic? So, we expect that to be pretty significant. The time to move is now, Digital transformation after the pandemic, Creating change through collaborative participation, allows users to see the lyrics to the songs theyre listening to, continued growth in the smartphone market. 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? Bring a business perspective to your technical and quantitative expertise with a bachelors degree in management, business analytics, or finance. We -- so are looking closely at open headcount to see which of those we want to backfill and which of those we will also eliminate sort of, as we've mentioned a number of times as we try and be more efficient with deploying capital and employees moving forward. If you need more lookups, subscriptions start at $39 USD/month. Tworzymy jzmioci donatury ipierwotnej symboliki. [Operator Instructions]. 4 strategies for digital growth from Spotifys CFO | MIT Sloan You may now disconnect. And since we're not committed to rolling that out, I don't really have much of a sort of comment, but to say that overall, we're committed to creating the best audio experience for consumers and creators in the world. - Spotify CFO Paul Vogel, Q3 2022 Earnings Call. When do you expect them to be released? There was outperformance in pretty much every region. Spotify announced its second-quarter 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. I don't think from a strategy point of view that it will differ all that much from Dawn's. Okay. You typically see MAU to Premium subscriber conversion in the 12 to 18-month range. 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". Do you expect any change to that conversion or to churn given the large MAU cohorts over the past couple of years? A full-time MBA program for mid-career leaders eager to dedicate one year of discovery for a lifetime of impact. All right. We look at all the trends, and we try and understand how big these things could go. Noting continued growth in the smartphone market, Vogel said it was reasonable to assume that streaming will continue to grow as well. WebPaul Vogel, Spotify CFO, joins 'Closing Bell' to discuss the company's latest quarter and how his business differs from Netflix. While bears can criticise Spotify's lack of gross margin expansion since IPO, it is difficult to criticise their user growth or engagement, which has increased like clockwork each quarter. Mokave totake rcznie robiona biuteria lubna iZarczynowa. Spotify We've got another question from Rich Greenfield on podcasting. So, I feel really good about that. The mission of the MIT Sloan School of Management is to develop principled, innovative leaders who improve the world and to generate ideas that advance management practice. So, when we look at a market, there's generally two strategies we can do that. Some of the investments we made in the back half of the year are still slightly impacting Q1. The company invests heavily in research and development to improve that playlist experience an investment it hopes will deliver advantage in a highly competitive market. 2023 marks a new chapter for us, but our commitment to achieving our goals remains the same. Okay. Paul Aaron Vogel Net Worth (2023) | wallmine And I think that's a sign of maturity that you go for the growth first and then you seek the efficiency. Okay. Like I said, we slightly outperformed in Q4, and we'll see how the year unfolds. We're not going to quantify the savings. Through intellectual rigor and experiential learning, this full-time, two-year MBA program develops leaders who make a difference in the world. So, we are shifting to focus on tightening our spend and becoming more efficient. Exactly when we break even, we haven't said yet, but we feel like we're on a good path, and we feel like we are in a good position right now to have that speed and efficiency that we want to have in 2023. Sienkiewicza 82/84 In 2021, we said that 2022 would be an investment year, and it was. So, the primary strategy is very simple. 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. Yes. All right. 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. I think what we said in my outset is we expect really strong growth. We do sometimes 10, sometimes hundreds of those within quarters. By the numbers: Spotify said that 25% of its total monthly active users engaged with podcast content in Q4, up from 22% in Q3 2020. It expects to add another 15 million monthly active users and 7 million net new paid subscribers. WebPaul Vogel Phone Number Found 5 phone numbers: View Paul's Email & Phone (It's Free) 5 free lookups per month. So, the answer is yes to 2022 being the peak drag from podcast. And during 2023, you'll see a lot of new things roll out in the audio book category from Spotify. Hired less than a year ago, Jason Sole director of the mayors Community-First Public Safety Initiative said he was forced to resign after a series of clashes with the mayors leadership and left the position Feb. 4.Sole made $102,000. As the Chief Financial Officer of Spotify Technology S.A, the total compensation of Mr Vogel at Spotify Technology S.A is Yes, the podcast reaching breakeven within several years. So, we had kind of lowered expectations coming into Q4. And consequently, you should also take this to mean that we will be more selective with our overall spending moving forward. And I don't have anything specific to announce at this point, but we are constantly discussing with our rights holder partners around various price increases that we would be doing. Sometimes that is keeping the price low and grow the number of users on the platform. He is To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. We're now in an even stronger competitive position, and I'm confident in our future prospects. And so, to have both Gustav and Alex help me in the day-to-day in this much more complex business, I think, will materially mean that we'll have more brains thinking about these things. There are 15 older and 11 younger executives at Spotify Technology S.A. Such R&D costs should naturally decrease once Spotify's recently launched products become more established and the heavy upfront product-related investments are complete. You've seen it show up in both gross margin and on the operating expense line, and we expect to see improvements as we move into 2023. 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.. So, marketing was under Alex preview previously, but not advertising and not content. King of Audio 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. We had strength, family plan and Duo plan. 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. No credit card required. The opportunity is limitless, he said. He reminded analysts Spotify decided to proactively reduce its hiring growth rate by 25% in the third quarter, which Billboard reported on June 15. So, it wasn't just that we took audience from another platform, but we actually grew the pie meaningfully for podcasters. I think we've done pretty well. And that will be a big improvement from prior org setups. 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). 90 318d, Administratorem danych osobowych zbieranych za porednictwem sklepu internetowego jest Sprzedawca (Jubilerka Pola Chrobot). We've seen podcast MAU as a percent of our total MAU continue to increase. While Spotify's current losses are harmless in the context of a balance sheet with 3.7b cash, cash equivalents, and short-term investments, 2023 will be a crucial year for Spotify to reclaim the trust of investors and demonstrate the viability of their long-term guidance for 40% gross and 20% operating margins. Paul Vogel is 47, he's been the Chief Financial Officer of Spotify Technology S.A since 2020. 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". So even within Q4, it was pretty up and down. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. 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. He came to the Pioneer Press in 2005 and brings a testy East Coast attitude to St. Paul beat reporting. And while it was really great to close out 2022 on such a high note, the fourth quarter is -- I think we just really one of many proof points that shows that the investments we made over the last few years are really paying dividends. Yes. Open. A lot is things that we test and learn. For the last four years, hes Paul Vogel - Chief Financial Officer - Spotify | ZoomInfo And so, when we talk about an investment year, some of that is part of what was going on. This is for Daniel. Hey, everyone and happy new year and thanks for joining us. And then we're going to holistically now look at the business rather than looking at things bit by bit. Over-spending and under-pricing: Spotifys commercial missteps 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. 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). We'll start with opening comments from Daniel and Paul and afterwards, we'll be happy to answer your questions. 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. 4 strategies for digital growth from Spotify We haven't given a timeline on that. It is actually making real sort of material decision-making at the top. Growth in the quarter was lower than forecast due mainly to currency movements and to a lesser degree, lower marketing spending. A joint program for mid-career professionals that integrates engineering and systems thinking. Paul Vogel And this is true across the world, really at this point. The Ledger: Spotifys Paul Vogel Is Cautiously Optimistic on Growth Total monthly active users grew to 489 million in Q4. 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. LeBron James on Stephen Curry: Its great to have people like that "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. Share. And then, Paul, maybe you can chime in on the detailed questions. shareholder interests. 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. So pretty consistent with what we've said in the past in terms of what the impacts were in 2022 and how that will change in '23 and beyond. Now there are more than 6,000. But again, I think we believe we'll get the benefits of some of those moving forward into 2023, and you'll see the incremental investment slow and the benefits kind of hit in '23. 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. And the number of users on our platform that are consuming, podcast keeps growing as well. Our user and subscriber numbers continue to climb, showing the value of our investments in the platform over the past few years. So that's going to be a net positive as more and more of the revenue starts shifting to those categories. Our next question is going to come from Deepak on user choice billing. And as I mentioned in my opening remarks, -- some of these things we expected to take longer on seeing the benefits, but we're seeing them already in 2022, and I think that's a real positive news for the years to come. Overall, Q3 involved more of the same for Spotify. Reconciliations between our IFRS and non-IFRS financial measures can be found in our letter to shareholders, in the financial section of our Investor Relations website and also furnished today on Form 6-K. And with that, I'll turn it over to Daniel. Theyre lessons other companies can draw on as they compete in the burgeoning market for platform services. 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.