Q2 2024 Spotify Technology SA Earnings Call Transcript
Key Points
- Spotify Technology SA (SPOT) reported its highest free cash flow quarter ever, marking three consecutive quarters of profitability.
- The company expanded its gross margin and beat its subscriber forecast by adding 7 million net new subscribers.
- Spotify Technology SA (SPOT) successfully implemented price increases in several key markets, including the US, with lower churn rates than previous increases.
- The company introduced new subscription plans, offering more listening choices and successfully attracting different consumer segments.
- Spotify Technology SA (SPOT) saw strong engagement and growth in its podcast and audiobook offerings, contributing to overall platform engagement.
- Monthly Active Users (MAU) growth was below expectations, particularly in developing markets where user acquisition and engagement are more challenging.
- Advertising growth decelerated, with the company noting volatility in upper funnel brand-related campaigns.
- The company faces challenges in achieving high ROI from marketing spend in developing markets, impacting user acquisition strategies.
- There are ongoing legal and relationship complexities with music labels and publishers, which could impact future negotiations and cost structures.
- Despite price increases, there is a risk of churn and the need to closely monitor consumer reactions to further price adjustments.
Hello and welcome to the Spotify Q2 '24 earnings call. All lines have been placed on on mute to prevent any background noise.
I would now like to turn the conference over to Bryan Goldberg, Head of Investor Relations. You may begin.
Thanks, operator, and welcome to Spotify's second-quarter 2024 earnings conference call. Joining us today will be Daniel Ek, our CEO; and Ben Kung, our Interim CFO and VP of Financial Planning and Analysis. We'll start with opening comments from Daniel and Ben, and afterwards, we'll be happy to answer your questions.
Questions can be submitted by going to slido.com and using the code #SpotifyEarningsQ224. Analysts can ask questions directly into Slido, and all participants can then vote on the questions they find the most relevant. If for some reason, you don't have access to Slido, you can e-mail Investor Relations at [email protected], and we'll add in your question.
Before we begin, let me quickly cover the Safe Harbor. During this call,
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