Spotify Technology (SPOT) Q3 Earnings call transcript Nov 12, 2024

Daily EarningsWednesday, Nov 13, 2024 4:26 am ET

1min read

In Spotify's latest earnings call for the third quarter of 2024, the company showcased its impressive financial performance and strategic initiatives, providing a glimpse into its future plans. The call, led by CEO Daniel Ek and CFO Christian Luiga, highlighted the company's focus on growth, profitability, and innovation.

Financial Highlights

Spotify reported a record-breaking quarter, with significant growth in both MAUs (Monthly Active Users) and subscribers. The company added 6 million net subscribers, reaching a total of 252 million, and saw a 14 million increase in MAUs, totaling 640 million. Total revenue grew by 21% year-on-year on a constant currency basis, reaching EUR 4 billion, with Premium revenue up 24%. The company also achieved a record EUR 711 million in free cash flow, demonstrating its financial strength.

Innovation and Growth

The call underscored Spotify's commitment to innovation and growth. The company is expanding its video offerings, hinting at upcoming announcements, and is poised to launch new subscription tiers. The focus on video content is a strategic move to cater to the evolving consumer demand and diversify its offerings. Additionally, the company's expansion into audiobooks in Europe and the launch of new subscription tiers have been successful, further solidifying its position in the market.

Investment and Capital Allocation

New CFO Christian Luiga expressed his excitement about joining Spotify and emphasized the importance of a strong balance sheet for future growth. The company's balance sheet, with EUR 6.1 billion in cash and equivalents and EUR 1.3 billion in exchangeable debt, provides a solid foundation for strategic investments. The company is committed to investing in opportunities that make sense for the business, with a focus on delivering exceptional value to users.

Looking Ahead

Spotify is forecasting continued growth and profitability expansion in the coming years. The company is expected to close the year with a focus on monetization, aiming to make further progress across all key metrics. Daniel Ek, in his closing remarks, expressed his optimism about the future, highlighting the company's ability to innovate and adapt to the ever-evolving technology landscape.

In conclusion, Spotify's third-quarter earnings call for 2024 underscored its strong financial performance, strategic initiatives, and commitment to growth and innovation. The company's focus on expanding its offerings, capital allocation, and disciplined management positions it well for continued success in the future. With its strategic moves and clear vision, Spotify is set to remain a key player in the music and technology industry.

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