Table of Contents
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a. Key Points
- The premium segment continues to outperform ad-based.
- The advertising gross margin contraction is temporary.
- Spotify is investing in more compute and product marketing.
- Recent price hikes went well.
b. Demand
- Met revenue estimate & beat guidance by 0.6%.
- Premium revenue beat estimate by 1%.
- Ad-supported revenue missed estimate by 9%.
- Beat monthly active user (MAU) estimate & identical guidance by 2 million each.
- Met premium subscriber estimate.
- Beat premium average revenue per user (ARPU) estimate by 1.4%.
- More context on demand later in this piece.
c. Profits & Margins
- Beat 32.8% GPM estimate by 20 basis points (bps; 1 basis point = 0.01%) & beat guidance by 20 bps.
- Beat EBIT estimate by 4.4% & beat guidance by 8.3%.
- Beat FCF estimate by 4.3%.
- More context on margins later in this piece.
