Spotify Technology Q3 EPS €(0.41), Revenue €2.5B, MAUs 381M, Up 19% YoY

Spotify Technology S.A. Announces Financial Results for Third Quarter 2021:

MONTHLY ACTIVE USERS (“MAUs”)

Total MAUs grew 19% Y/Y to 381 million in the quarter, up from 365 million last quarter and near the top end of our guidance range. Spotify experienced double digit Y/Y growth in all regions with particular strength in Rest of World where performance was aided by the resumption of marketing activity in India along with above-plan growth in the Philippines and Indonesia. Spotify also saw improved momentum across the 86 markets launched earlier this year, with outperformance led by South Korea, Bangladesh, and Pakistan.

Revenue

Revenue of €2,501 million grew 27% Y/Y in Q3 (or 26% Y/Y on a constant currency basis) and was at the top end of our guidance range due to significant strength in advertising. Premium Revenue grew 22% Y/Y to €2,178 million (or 21% Y/Y constant currency) while Ad-Supported Revenue was particularly strong, growing 75% Y/Y to €323 million (or 75% Y/Y constant currency).

Within Premium, average revenue per user (“ARPU”) of €4.34 in Q3 was up 4% Y/Y (or up 3% Y/Y constant currency vs. flat Y/Y in Q2). Excluding the impact of FX, Spotify saw a benefit to ARPU primarily from our price increases.

Q4 2021 OUTLOOK

The following forward-looking statements reflect Spotify’s expectations as of October 27, 2021 and are subject to substantial uncertainty. The estimates below utilize the same methodology we’ve used in prior quarters with respect to our guidance and the potential range of outcomes. Given the extraordinary operating circumstances Spotify currently face with respect to the impact of COVID-19, there is a greater likelihood of variances with respect to those ranges than typical quarters.

Q4 2021 Guidance: Spotify have maintained our prior Q4 guidance for Total MAUs, Total Premium Subscribers, and Operating Profit/Loss, and have increased the bottom end of the range for Total Revenue and Gross Margin.

• ●Total MAUs: 400-407 million
• ●Total Premium Subscribers:177-181 million
• ●Total Revenue:€2.54-€2.68 billion
• ●Gross Margin:25.1-26.1%
• ●Operating Profit/Loss:€(152)-€(72) million

SHARE REPURCHASE PROGRAM

On August 20, 2021, Spotify announced a program to repurchase up to $1.0 billion of its ordinary shares. The repurchase program will expire on April 21, 2026. Through September 30, 2021, the company repurchased 157,510 shares for €30 million under this program at an average cost of $222.86 per share.

Spotify shares rose 1.2% in premarket trading.