Q3 2025 Spotify Technology SA Earnings Call

November 4, 2025

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Christian Luiga: If we then look ahead to guidance, in Q4, we are forecasting 745 million MEU, an increase of 32 million from Q3, and 289 million subscribers. Our subscriber outlook implies net additions of 8 million, which is slightly below prior year net ads due to the expected small amount of churn we see when we raise prices. This year, we have new pricing in more than 150 markets versus 6 in the prior year. In addition, we recently rolled out the enhanced free tier globally, and we are encouraged by the early benefits we're seeing to our funnel. We view this business as set up well for conversion and continued healthy subscriber growth in 2026. We're also forecasting 4.5 billion in total Q4 revenue, representing an improved constant currency year-on-year growth rate of around 13% versus the 12% we just delivered in Q3.

Speaker #3: 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 email investorrelations@ir@spotify.com, and we'll add in your question.

Speaker #3: Before we begin, let me quickly cover the Safe Harbor. During this call, we'll be making certain forward-looking statements, including projections or estimates about the future performance of the company.

Speaker #3: These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed on today's call.

Speaker #3: In our shareholder deck and in filings with the Securities and Exchange Commission, during this call, we'll also refer to certain non-IFRS financial measures. Reconciliations between our IFRS and non-IFRS financial measures can be found in our shareholder deck, in the financial section of our investor relations website, and also furnished today on Form 6-K.

Speaker #3: And with that, I'll turn it over to Daniel. All right. Thanks, Bryan, and hey, everyone, and thanks for joining us. Overall, it was a very strong quarter, especially on the user side.

Okay.

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Christian Luiga: We're also forecasting a year-on-year ARPU growth of around 2% on a constant currency basis. We expect a Q4 gross margin of 32.9% and operating income of 620 million. In summary, we're pleased with how the business is tracking into year-end. As Daniel mentioned, we will continue to make investments to generate long-term growth and returns for the company. While this can lead to quarter-to-quarter variability in terms of margin progression, we believe this is the right approach that sets us up well to advance towards our long-term goals. Turning to 2026, while it's too early to provide guidance, I do want to point out that our first quarter gross margin typically sees a sequential step down from the fourth quarter from advertising seasonality, and we expect the same for Q1 2026.

Yeah.

Speaker #3: We reached a significant milestone surpassing 700 million monthly active users beating our guidance. And we were right in line with subscribers, and we also beat on revenue, gross margin, and operating income.

Yeah.

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Speaker #3: Given that this is a year of transition for me, I've been reflecting on what has proven time and again to drive the company forward.

Speaker #3: And when I strip everything else away, it really comes back to the same thing: our user fundamentals. It's where everything starts and everything stops.

Speaker #3: And as this quarter shows, the user side of the business is really strong. Engagement continues to strengthen across music, podcasts, video, and audiobooks. People come to Spotify, and they stay on Spotify.

Speaker #3: And this is across all markets and formats. Gustav will give you more color on the pace of shipping during this year of accelerated execution and the impact it's having, but the data is clear.

Christian Luiga: Beyond this, we are confident in our path and expect 2026 to be another year of healthy revenue growth, disciplinary investments, and margin and cash flow improvement. With that, I'll hand it back to you, Bryan.

Bryan Goldberg: Great. Thanks, Christian. Again, if you've got any questions, please go to Slido.com/spotifyearningsq325. We'll be reading the questions in the order they appear in the queue with respect to how people vote up their preference for questions. Our first question today is going to come from Jason Helfstein on profitability. Can you talk through the puts and takes around gross margins across your premium and advertising segments in third quarter, and how should we think about gross margins in the fourth quarter and 2026?

Great. Thanks, Christian. Again, if you've got any questions, please go to Slido.com/spotifyearningsq325. We'll be reading the questions in the order they appear in the queue with respect to how people vote up their preference for questions. Our first question today is going to come from Jason Helfstein on profitability. Can you talk through the puts and takes around gross margins across your premium and advertising segments in third quarter, and how should we think about gross margins in the fourth quarter and 2026?

Christian Luiga: Thank you, Jason. Yeah, we are happy gross margin expansion is happening for the company this year. And as you are pointing out, there is a pressure more on the premium side than on the advertising side. That is really nothing really to worry about. We started this year by letting you know that we are moving, starting up the SPP program and moving over some of our podcast videos and podcasts to utilize that content to give higher quality into the premium side. And when we do that, we recognize that cost now in premium instead of in advertising. That shift doesn't mean anything on a total company level, but it actually then dampens a bit the margin on the premium side and improves it on the advertising side.

Christian Luiga: As we started this in Q1 this year, it will come through all through the year and therefore also impact Q4 in the same way.

Bryan Goldberg: All right. Our next question is going to come from Jessica Reif Ehrlich on superfan potential. The major record labels have hinted at what's to come for a premium superfan tier. Will this product be created by the major labels for all DSPs, or will there be a Spotify-specific product?

All right. Our next question is going to come from Jessica Reif Ehrlich on superfan potential. The major record labels have hinted at what's to come for a premium superfan tier. Will this product be created by the major labels for all DSPs, or will there be a Spotify-specific product?

Daniel Ek: Hi, Jessica. Like I mentioned in previous earnings calls, we keep a very high bar for our products. We simply ship products when they're ready. But what I can tell you really is that we are in deep collaboration with most of the relevant rights holders out there. Let me also just give you an example of why this is a good strategy, putting add-ons on Spotify on top of our premium subscription. So a few months ago, we launched what we call Audiobooks Plus, which is a recurring option for people to use when they hit the wall of 15 hours in the markets where we have audiobooks. The uptake on that specific add-on subscription has been really, really good. What's more is that on top of that, users are also buying top-ups. So really what we're seeing is our ARPU levels that we've never seen before.

Daniel Ek: So we're really encouraged by this as we keep launching add-ons for other verticals in the Spotify ecosystem.

Bryan Goldberg: Okay. Our next question, or a few questions here from Justin Patterson on AI. What impact do you believe AI will have on the music ecosystem, and how does the ChatGPT integration fit into that? And in your collaboration with the labels, you also alluded to building products that create new revenue streams for the industry. Could you expand on what that means for royalties?

Okay. Our next question, or a few questions here from Justin Patterson on AI. What impact do you believe AI will have on the music ecosystem, and how does the ChatGPT integration fit into that? And in your collaboration with the labels, you also alluded to building products that create new revenue streams for the industry. Could you expand on what that means for royalties?

Good morning, and welcome everyone to the Spotify third quarter 2025 earnings call.

L J.

Today's conference is being recorded.

Lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press the star key followed by the number one on your telephone keypad, if you will.

Gustav Söderström: This is Gustav. Thanks, Justin. I'll take that question. There are a couple of questions in here. I'll start sort of at the very higher level of what it means. One way to think about it means different things for us. For a consumer, it means a couple of things. First of all, you should expect, in general, recommendations to just get a lot better as the industry, including us, switches to what is called generative recommender systems. These are using generative AI to understand much more of what the consumer is doing. One way to think about this is that recommendations are moving from just looking at passive clicks, saves, and so forth to actually understanding content and understanding you. And specifically, and very exciting for us, even understanding English.

To withdraw your question Press Star one again.

At this time I would like to turn the conference over to Bryan Goldberg head of Investor Relations. Please go ahead.

Thanks, Operator, and welcome to Spotify is third quarter 2025 earnings conference call joining us today will be Daniel Burke, our CEO, Alex North room, our co President and Chief business Officer, who stopped soda schrum, our co president and Chief product and Technology Officer, and Christian Luis our CFO, we'll start with opening comments from the team and afterwards, we'll be happy to answer your.

<unk> questions can be submitted by going to slide O Dot Com S. L. I D O dot com and using the code hashtag Spotify earnings Q3, twenty-five analysts can ask questions directly into slide Oh, and all participants can then vote on the questions. They find the most relevant.

Gustav Söderström: This is why you can talk to the Spotify DJ in English, and it actually understands what you mean and can give you personalized recommendations. I think if you play that out, what you should expect at a higher level is just much more user control, what we internally call personalization 2.0, where you can literally talk to Spotify as if it was a person, and it understands your specific taste. You can tell Spotify that you're actually tired of this specific genre now, and you want to listen to something new that we have never seen in your listening data, so we could never predict it, but you can tell us. This is what you should expect: different level of personalization, different level of user control. On ChatGPT specifically, this is part of our Ubiquity strategy.

For some reason you don't have access to slide Oh, you can email investor relations at IR at Spotify Dot Com and we will add on your question.

Before we begin let me quickly cover the safe Harbor during this call, we'll be making certain forward looking statements, including projections or estimates about the future performance of the company.

These statements are based on current expectations and assumptions that are subject to risks and uncertainties actual results could differ materially because of factors discussed on today's call in our shareholder deck and in filings with the Securities and Exchange Commission.

During this call. We'll also refer to certain non <unk> financial measures reconciliations between our I F or S and non <unk> financial measures can be found in our shareholder deck in the financial section of our Investor Relations website and also furnished today on form 6K, and with that I'll turn it over to Daniel.

Gustav Söderström: One way to think about Spotify is that we've always tried to be where the users are. If the users are on Sonos, we're on Sonos. If they're in the car, we're in the car. If they're on Google searching for music, we're on Google. And a lot of people are in ChatGPT. So of course, we're going to be in ChatGPT. What's exciting about this is that you can do more than on many of the other platforms that we integrated in. The beautiful thing about ChatGPT is that you can combine the power of ChatGPT to understand the world and use cases with Spotify understanding you.

Alright, Thanks, Brian and Hey, everyone and thanks for joining US overall, it was a very strong quarter, especially on the user side, we reached a significant milestone surpassing 700 million monthly active users, beating our guidance and we were right in line with subscribers and we also beat on revenue gross margin and op.

Operating income.

Given that this is a year of transition for me I've been reflecting on what has proven time and again to drive the company forward and when I strip everything else away. It really comes back to the same thing our user fundamentals, it's where everything starts and everything stops.

Gustav Söderström: So now you can ask for a playlist related to something that happened in the world, but instead of that playlist just being the same for everyone on ChatGPT, it's also going to understand your Spotify user taste and make it personal to you. This combination has never been possible before. On your last question of products that we build with the industry, the way we think about this and generative AI for music is that just as with piracy, we think someone needs to work with the industry and with the artists to make this technology available for them in a legal way where we don't ask for forgiveness and where artists can actually participate and make money. That's why we're doing this.

And as this quarter shows the user side of the business is really strong engagement continues to strengthen across music podcasts video and audio books and people come to Spotify and they stay on Spotify and this is across all markets and formats. Gustave will give you more color on the pace of shipping during this year of accelerated execution.

And the impact it's having but the data is clear our multi format strategy is working exactly as we hoped.

Uh, our Q3 results once again, highlight just how well positioned Spotify is as we keep pushing boundaries through Innovation and bringing even more value to artists, podcasters, authors, and users, around the world.

And with that foundation in mind, let me talk about how we think about building the business Ive said this before but it's worth repeating we don't optimize for quarterly results, we optimized for lifetime value because of our scale very few metrics shifts quickly the decisions. We're executing on today were set in motion well before.

A few weeks ago, we had a leadership team uh, come together in New York for strategy sessions.

Bryan Goldberg: Okay. Our next question is from Eric Sheridan on video strategy. Can you discuss the potential implications of your partnership with Netflix for video podcasts of The Ringer? How does this impact your overall strategy with respect to driving more video consumption on the platform?

Okay. Our next question is from Eric Sheridan on video strategy. Can you discuss the potential implications of your partnership with Netflix for video podcasts of The Ringer? How does this impact your overall strategy with respect to driving more video consumption on the platform?

Gustav and I shared our thoughts about Spotify's future and how we will evolve over the next few years. I can't remember a time when the company was more aligned, and this is just having an outsized impact on our performance.

Numbers in some cases. This means we made these calls many quarters ago or in some cases even years.

Daniel Ek: Good questions, Eric. So at the heart of it is that we believe in being creator first. So what we think is that when the creator wins, we win. And as creators optimize to create their best shows and interviews, which is really what they're focused on, they want it to syndicate everywhere. And we believe, of course, in helping them to reach audiences in as many places as possible, which is consistent with our core philosophy on being creator first. And also, of course, to help them monetize as much as possible. So the partnership with Netflix that you're asking about is really a meaningful opportunity for both of these beliefs and just a natural extension of our ecosystem. And what's more is that we're already seeing some strong interest from creators who want to use Spotify as sort of their distribution hub, if you will.

To build on what Daniel said, the real magic is in our ability to ship faster and smarter and you'll hear more from Gustav about this in a minute.

But that doesn't mean, we get a free pass on our performance our job is to make smart investments that create more value over time.

At these efforts there, driving user growth, the top of the funnel, which then propels the flywheel and fuels the strength of our overall business.

And we fully expect you to hold us accountable for that our goal is to deliver extraordinary results and that means having both a great product and a great business and those things are ending conflict they compound each other.

Now, when you look at MEU in isolation, the global rollout of our enhanced free experience was key, contributing to millions of new listeners entering the Spotify ecosystem.

So take our partner dynamics as one example, I get asked about these relationships all the time, when we signed new multi year licensing deals with our partners. The market, mostly assumes it's a zero sum game, there's a winner and there's a looser and everyone tries to figure out who fell into what camp RV.

It's having a huge impact on engagement and retention, which we know is the key leading indicator of even more growth and even more conversion.

On the subscriber side, we saw continued growth. Across all regions and users are spending more days and more hours on Spotify than ever before.

Notably we continue to take market share Even in our most competitive markets.

Our view is difference we don't think it's a zero sum game at all quarter to quarter. The math may not immediately be obvious, but here's what actually happens those deals give us that flexibility to innovate and move us closer to our long term financial goals, we can build new products. We can launch new features.

Daniel Ek: To your second question more specifically, typically, when we have shows that originate on Spotify and we put them on YouTube, historically, that's just been driving even more awareness about the show and where it originated. And typically, what we see is just net incremental usage on Spotify coming from that. So very encouraged and very exciting to have this new Netflix partnership being rolled out as we speak.

We also saw a steady retention rates following the roll out of our recent price increases across, our more than 150 markets.

These results, show the power of the product and the Loyalty of our subscribers.

And as we look at the growth across these 3 content, verticals at Spotify, I want to share just a few highlights.

Faster and that drives better user outcomes more growth higher engagements stronger retention, which then drives a better business, it's a flywheel and a playbook we've run many many times our partners also do better so both sides win and that's what good long term investments looked like.

Bryan Goldberg: Okay. Next question from Rich Greenfield on premium conversion. In your Instagram post, Gustav mentioned that free users liked the recent upgrades to their free functionality. Have you seen any changes to the rate of upgrade from free to premium as a result?

Okay. Next question from Rich Greenfield on premium conversion. In your Instagram post, Gustav mentioned that free users liked the recent upgrades to their free functionality. Have you seen any changes to the rate of upgrade from free to premium as a result?

In music. We continue to help artists reach massive Global audiences. This past quarter, we saw artists break multiple streaming records of genres. And we've seen a number of new artists emerge AS Global fan. Favorites climbing, our streaming charts at record pace.

Before I hand, it over to Alex one notes. So following today I have one earnings call left S. CEO as you know I'll be transitioning to executive Chairman on January 1st with Alex and Gustaf stepping into their roles as co. Ceos, you will hear more from them today than you typically would in our honor.

We also hosted several immersive fan activations and intimate performances. We launched in-app experiences that celebrate some of the most iconic discographies.

Gustav Söderström: Thank you, Rich. Yeah, we are excited by all the features we launched, and we hope several of you are excited about specifically the Apple TV features as well. What we see is indeed more usage. The way to think about Spotify is that you have a few proxies for what is ultimately retention and subscription value. It is more usage and specifically more usage, more days of the month, which we call active days. What we try to optimize for is more engagements per day, but specifically also more days per month. We know over time that this simply leads to more conversion. In fact, we coined a phrase many years ago that says the more you play, the more you pay eventually, which is why we always try to maximize engagement both in the free tier and in the paid tier.

And we continue our partnership with FC Barcelona, which just unite fan communities around the world proving to be a strong user recruitment tool for us for Spotify.

Also, mentioned the relationship with our music label partners.

And Publishing partners.

Our Q4 call in February they'll run points and with that I'll turn it over to Alex.

Thanks, Daniel no pressure.

Over the quarter. We finalized groundbreaking direct license deals, bringing value to artists songwriters rights holders and Spotify.

Our Q3 results once again highlight just how well positioned Spotify is as we keep pushing boundaries through innovation and bringing even more value to artists podcasts, there's authors and users around the world.

What's good for Spotify is also good for the industry we support, which of course, include music podcasts and audiobooks.

I would just excited to now capture the opportunities that these these deals unlock.

A few weeks ago, we had a leadership team come together in New York for strategy sessions Gustaf.

At this time and I shared our thoughts about Spotify future and how will evolve over the next few years I can't remember a time when the company was more aligned and this is just having an outsized impact on our performance.

In podcasts more than 390 million users have streamed a video podcast on Spotify now, that's a 54% increase year-over-year.

Gustav Söderström: So we are very certain that this will go the way it's always gone. People are using the service more, which is going to create more goodness for us, both free and paid in the future.

We now have almost 500,000 video podcast shows on our platform time spent with video content has more than doubled year-over-year.

In mostly by video podcasts.

To build on what Daniel said, the real magic is in our ability to ship faster and smarter and Youll hear more from Gustaf about this in a minute.

Bryan Goldberg: Okay. We've got another question from Jessica Reif Ehrlich, this time on the leadership transition. Gustav and Alex, as you prepare to take over as co-CEOs in January, what are you most excited about in your respective areas?

Okay. We've got another question from Jessica Reif Ehrlich, this time on the leadership transition. Gustav and Alex, as you prepare to take over as co-CEOs in January, what are you most excited about in your respective areas?

And this consumption has increased by more than 80% since the launch of the Spotify partner program or spp.

This effort there driving user growth across the top of the funnel, which then propels the flywheel of fuels the strength of our overall business.

And when you look at MCU and isolation, the global rollout of our enhanced free experience was a key contributor bringing millions of new listeners into the Spotify ecosystem is.

We also recently announced that we're bringing some of our top video podcasts from Spotify Studios and the ringer to Netflix starting in early 2026 in the US uh with more markets to follow.

Daniel Ek: Thanks for that, Jessica. I'll start, Gustav, and then you can come in. I'm honestly really excited because I know that the ambition level is going up. This has been the case. We've always had an increasing ambition level at Spotify. We have this just amazing platform. The user fundamentals are really firing on all cylinders. Daniel spoke to this in his remarks. With that, we sort of have the three verticals that we have out there right now, all of which are producing results. So we really have a platform to stand on that we can leverage to fulfill these new ambitions. As you heard us talk about before, we now hit roughly 3% of the world's population. 3% of the world's population is subscribing to Spotify on a recurring basis. Every month, they come back.

It's having a huge impact on engagement and retention, which we know is the key leading indicator of even more growth and even more conversion.

We want our creators to grow and scale their audiences around the world and in turn, this also opens up an interesting monetization opportunity for Spotify.

On the subscriber side, we saw continued growth across all regions and user spending more days and more hours on spotify than ever before notably we continue to take market share even in our most competitive markets.

And this partnership extends our ecosystem, building new fans and serving up this wider distribution channels.

And in audiobooks, we are continuing to reshape the category, fueling growth and discovery across the publishing world in just 2 years. Spotify has now introduced tens of millions of new, younger listeners to audiobooks.

We also saw steady retention rates following the rollout of our recent price increases across our more than 150 markets.

We've brought audiobooks to 14 Global markets and have more than tripled our catalog in English language markets to over 500,000 titles.

These results show the power of the product.

The loyalty of our subscribers.

And as we look at the growth across these three content verticals at Spotify I want to share just a few highlights.

More than half of our eligible premium users have played an audio book and the number of people listening to our notebook, listening to an audio book Rose 36% year-over-year.

In music, we continue to help artist reach massive global audiences. This past quarter, we saw artist break multiple streaming records across genres, and we've seen a number of new artists emerge as global fan favorites climbing our screening charts at record pace.

With listening hours up even more.

Daniel Ek: With these three verticals, we really have a very expansive TAM. We believe that most of the people in the world are interested in music. Most of the people in the world are interested in even the more expansive stuff like books, podcasts, and video on top of that. This just puts us in a very good position to fulfill this new ambition of getting to a billion subscribers.

We also recently launched add-on subscriptions for premium users, giving listeners more Choice, opening up the format to new potential fans worldwide and enhancing The Experience itself.

We also hosted several immersive fan activations and intimate performances, we launched in App experiences that celebrate some of the most iconic discography.

Are you still uh work to be done to continue to grow the entire book industry but it is incredible progress and it's so great to see so much enthusiasm for these offerings

And we continue our partnership with FC Barcelona, which is United Bank community.

Around the world proving to be a strong user recruitment tool for us for Spotify.

I also want to quickly speak to our ads business last quarter. We talked about the need to recalibrate and to improve our execution.

Gustav Söderström: So I'll fill in. In a way, nothing has changed in terms of why I'm excited. In a way, some things are actually new. I've managed to be excited about Spotify for over 17 years. The reason I've been excited about Spotify for 17 years is still the same, which is what Daniel mentioned initially, that if you just look at the opportunity, music specifically, but also podcasts and books, but music specifically is probably the single biggest TAM you can find. I think it's even bigger than social networking or anything. There's no one in the world that really doesn't like music at all. It is sort of the biggest TAM you can participate in. That's been the case for a long time.

Daniel also mentioned the relationship with our music and Labor partners and.

We remain confident in our long-term strategy and the Dynamics are improving.

In publishing partners.

Over the quarter, we finalized groundbreaking direct license deals, bringing value to artists songwriters rights holders and Spotify.

We're really pushing hard to build for the long term and while these changes will take some time, we believe that yield significant results in the years ahead.

What's good for Spotify is also good for the industries, we support which of course include music podcasts and audiobooks.

So overall, our strong performance, this quarter is proof that our work isn't just adding up.

I was just excited to now capture new opportunities at DSS These deals unlock.

In podcasts more than 390 million users have stream the video podcasts on Spotify and out that's a 54% increase year over year.

Its compounding we're seeing faster growth higher efficiencies and a product that's getting better and better. As we continue to add value and solve problems for users artists creators and authors.

Now, I'll talk toss it over to gusta gusta.

We now have almost 500000 video podcast shows on our platform.

Time spent with video content has more than doubled year over year.

Gustav Söderström: But what is specifically exciting for me right now is that we are in one of these big macro shifts, the AI macro shift. That is, I've said this before, but it's for me certainly the most exciting since the smartphone came along. And so if you look at those two together, when you enter one of these macro shifts where you know from a product point of view, and I'm a product guy, you're going to get to reinnovate things and things are going to change, you kind of want to be in a position where the TAM is really big, you have a strong, healthy company with a lot of talented people behind you. So that's exactly where I find myself right now. That's why I'm excited.

Driven mostly by video podcasts.

Thanks, Alex. So this quarter really brought the year of accelerated execution to life. This is incredible momentum and the things we've been investing in for years such as personalization interactivity and ubiquity are really paying off.

And as consumption as.

Has increased by more than 80% since the launch of the Spotify partner program of STP.

We've been doubling down on what's working as we relentlessly, try to build the most valuable experience in the world.

We also recently announced that we're bringing some of our top video podcasts from Spotify Studios in the Ringer the Netflix starting in early 2026 in the U S.

And while we spent much of last year and part of this laying and building foundations, the pace of shipping and the speed of iteration are now at record levels.

With more markets to follow.

We want our creators to grow and scale their audiences around the world and in turn this also opens up an interesting monetization opportunity for Spotify.

We both strengthen the core experience and added new value with with a variety of First Market features and improvements in almost every facet of the product.

And his partnership extends our ecosystem.

Bryan Goldberg: All right. We've got a related question from Justin Patterson on time spent. You've often talked about a TAM in the billions of users. How do you think about the time spent opportunity for music and non-music content given new categories like audiobooks that have been additive to listening hours?

All right. We've got a related question from Justin Patterson on time spent. You've often talked about a TAM in the billions of users. How do you think about the time spent opportunity for music and non-music content given new categories like audiobooks that have been additive to listening hours?

Building, new fans and serving as wider distribution channels.

That's the balance. We're constantly trying to drive towards enhancing what Millions already love about Spotify, while also expanding into new areas that make the platform even more attractive for users and creators alike.

And an audio books, we are continuing to reshape the category fueling growth in discovery across the publishing world in just two years Spotify is now introduce tens of millions of new younger listeners to audio books.

And the results clearly show how this is growing both mu and subscribers.

Over just the last few months we've shipped more than 30, new core features. That's more than all of last year actually and we're not even done with the year yet.

Daniel Ek: Yeah, Justin. So I think much of this has been said already by both Gustav and Alex around the TAM and the opportunity. But I guess maybe to take a step back and what I think is more important, what is the superpower of this company? And I think the superpower of this company is really in the mix between building great product experiences and figuring out how to monetize those product experiences at a level which is different from almost any other platform. Because the reality is we deal with a lot of professional content where there's an expectancy for us to figure out monetization from the start. It's not something we can wait for and figure out in a few years. So that's really the superpower of this company.

We've brought audiobooks to 14 global markets and have more than tripled our catalog and English language markets to over 500000 titles.

More than half of our eligible prime users have played an audio book and the number of people listening to an album listening to audio book Rose, 36% year over year.

We have a comprehensive list of these in our Q4 infographic that's on our Newsroom but I wanted to share a few that really stand out as we focus on giving listeners more control, more ways to discover and more ways to connect.

With listening hours up even more.

First as Alex just mentioned, we roll out big enhancements to our free tier, the first real update to it since 2088.

We also recently launched add on subscriptions for premium features giving listeners more choice opening up the format to new potential fans worldwide and enhancing the experience itself.

With the majority of users starting their Spotify Journey on 3 and our bold Ambitions to continue to attract new users to streaming.

It was critically important to make this experience, even better.

There is still work to be done to continue to grow the entire book industry.

And building on what Alex said. It's now a much more competitive offering

But it is incredible progress and it's so great to see so much enthusiasm for these offerings.

Already outpacing our plan growth in Mao.

I also want to quickly speak to our ads business last quarter, we talked about the need to recalibrate and to improve our execution.

Daniel Ek: And when you then look at that from a TAM, not necessarily in numbers of users, but in time spent, it turns out that there's all of this amazing content that's out there, all of these amazing experiences that are out there that for whatever reason may not yet be at a user experience that is attractive to people or at a price point that makes it accessible to people. When you think about Spotify, that's really been at the intersection where we've been innovating. I think not only did we do that for music, not only did we do that for podcasting, but I think with audiobooks, that's certainly been our bet too, which is we just think that there is a lot more people that care about audiobooks than what the market was showing at the time. And that's part user experience and it's part business model.

For the 2 a fans. We also finally launched lossless audio for Spotify Premium users.

Along with mixing tools and support for third-party DJ decks.

We remain confident in our long term strategy and the dynamics are improving.

We're really pushing hard to build for the long term and while these changes will take some time, we believe will yield significant results in the years ahead.

We know that these were some of the most anticipated features and users around the world. Have responded really enters the enthusiastically to the Rival.

Overall, our strong performance this quarter is proof that our work isn't just adding up.

Now on social that you've heard me talk a lot about, you know, that users are constantly trading content and recommendations back in forth between each other.

It's compounding, we're seeing faster growth higher efficiencies and a product that's getting better and better as we continue to add value and solve problems for users artists creators and authors.

With our new in-app messaging feature. We made it even easier to share and discuss music podcasts and audio books with friends.

Now I'll toss it over to goes up with us.

And since our launch in the initial markets, just a few months ago, almost 25 million users have sent nearly 200 million messages already.

Thanks, Alex So this quarter really broke a year of accelerated execution to life. This incredible momentum and the things we've been investing in for years, such as personalization interactivity and ubiquity are really paying off.

We feel that we're unlocking a new, powerful way for users to connect on Spotify.

Daniel Ek: Now, it turns out that there's plenty of other things out there that have considerable time spent that also doesn't necessarily have the right user experience nor the right business model. And when you add AI to the mix of that, that's a foundational technology that's going to enable totally new user experiences and business models too. So we're really excited about it. And I think when you look at sort of the AI world at the moment, of course, it's the foundational models, and you have the sort of core assistant models that are doing incredibly well. But we aren't yet seeing a lot of these entirely new consumer experiences in AI having massive traction. But we think that there will be over the coming years, and we think we have the opportunity of being a net beneficiary of that.

Something many of you on this call, have long been asking for is an Apple TV version of Spotify.

We've been doubling down on what's working as we relentlessly try to build the most valuable experience in the world.

Which now has a dramatically improved user experience as it's built natively for the platform.

And while we spent much of last year and part of this leading and building foundations.

So shipping and the speed of a duration.

What? I really love about this specifically is that while the reason we had previously held off on a dedicated or native Apple TV app,

A record levels.

Was that the extra development cost?

We both strengthen the core experience and added new value with it.

A variety of first to market features and improvements in almost every facet of the products.

That's the balance we're constantly trying to drive towards enhancing what millions already love about Spotify, while also expanding into new areas make the platform, even more attractive for users and creators alike.

just wasn't worth it for us, but we were able to drastically reduce this cost by leveraging, AI where we could actually translate our general iOS application to tvos

I think this is interesting because this speaks to the ways that we are not truly able to use AI to quite drastically accelerate. Our productivity and development,

And the results clearly show this is growing both <unk> and subscribers.

Over just the last few months, we've shipped more than 30, new core features that's more than all of last year actually and we're not even done with the year yet.

In last quarter's Q&A. I talked a lot about how excited we are about AI in general and specifically the potential arrival of new form factors.

Bryan Goldberg: Okay. Our next question is from Rich Greenfield on advertising. Looking at a two-year stack of advertising revenue growth, FX neutral, you've decelerated from 31% in the third quarter of 2024 to 7% in the third quarter of 2025. And you've repeatedly talked to softness in pricing over the past several quarters. How do you return to robust ad growth?

Okay. Our next question is from Rich Greenfield on advertising. Looking at a two-year stack of advertising revenue growth, FX neutral, you've decelerated from 31% in the third quarter of 2024 to 7% in the third quarter of 2025. And you've repeatedly talked to softness in pricing over the past several quarters. How do you return to robust ad growth?

We have a comprehensive list of these in our Q4 infographic, that's an unusual but I wanted to share a few that really stand out as we focus on giving listeners more control more ways to discover and more ways to connect.

While there are lots of bold predictions out there, we think Spotify will benefit as products become even more media focused. As they extend to new hardware experiences that are always in your ears and on your face.

So perhaps you caught the live demo on Spotify on meta ais's, latest meta, Ray bands, at the recent developer event.

First as Alex just mentioned, we rollout big enhancements to our free tier.

First real update to it since 2018.

Daniel Ek: Thank you, Rich, for the question. Let me start, Christian, here, and then I'll hand over to you, Alex, if you want to pitch in something. You are completely right. I mean, we have a like-for-like single-digit growth now, a mid-single-digit growth now in Q3. We came from a much better position before when it came to growth levels. We did set a new long-term strategy that we believe in, and we are very confident that we will succeed with. It's not if, it's when. We came out in Q2 and expressed the progress and said that we are a little bit behind and we need a little bit more time. But we do see really good progress on the programmatic side. The question is when that programmatic side is then growing so much in amount that it compensates for the direct sales.

With the majority of users starting their support of our jointly owned three and our bold ambitions to continue to attract new users of streaming.

This integration allows users to connect, stream, and fully control Spotify, and we're excited to be featured as an example of one of the new and most requested innovations in the space.

Then there's, of course, our new partnership with ChatGPT.

It was critically important to make this experience even better.

And building on what Alex said, it's now a much more competitive offering.

Which is another example of the ways. We're expanding our Ubiquiti at strategy helping users, discover, and engage with Spotify in new ways Wherever You Are.

Improvements are really resonating globally, and we're already outpacing our plan growth in MCU.

For the two audio fans. We also finally launched lossless audio for Spotify premium users.

Once you've connected your Spotify account to chat, gbt you can ask chatty to create things like the perfect playlist for the countdown to your 2025 rap experience.

Along with mixing tools and support for third party DJ decks we.

or maybe a playlist with the zen-like vibe for when your in-laws come to visit for the holidays, whatever you think of

We know that these were some of the most anticipated features and users around the world have responded really enthusiastic enthusiastically to its arrival.

Now on social and you've heard me talk a lot about you know that users are constantly trailing content and recommendations back and forth between each other.

Now, I also want to highlight features that we previously announced that continued to gain popularity. The first is Jam, which allows friends to listen together in real time.

Daniel Ek: That needs then a little bit more of the DSPs. Now we have Amazon and Yahoo coming on board in Q3 and to be on board and add value. Then also the customers to shift more into the programmatic sales. And that is progressing well. But the inflection point is a little bit further out than we expected before Q2. But as I said in my remarks also, we see that we're expecting to be back on the growth that we want in H2 2026. I don't know if you want to add something there, Alex. Rich, my friend, I'll add something to this. So when it comes to ad sales, it's a question of when, not if it's going to happen. We remain confident in the long-term strategy that we put in place.

We recently hit 100 million monthly, listening hours on Jam this quarter with over 200 million, users, sharing content monthly.

With our new in App messaging feature we made it even easier to share and discuss music podcasts and audiobooks with brands.

It's proven to be a big driver of what Topline growth and retention.

And since our launch in the initial markets just a few months ago, almost 25 million users have sent nearly 200 million messages already.

Listening to Spotify. In cars is also outperforming every expectation that we had and it's become a huge part of users daily engagement.

Feel that we're unlocking a new powerful way for users to connect those qualified.

In fact, there are 2 245 million people. Now, listening in cars, which is 34% of Mao and 15% of all consumption hours.

Something many of you on this call have long been asking for is an Apple TV version on Spotify.

And zeroing in just on the US. This POS, this puts us well ahead of all other subscription-based audio services

Which now has a dramatically improved user experience as it's built natively for the platform.

What I really love about this specifically is that while the reason we had previously held off on a dedicated or native Apple TV App.

So all of these features and enhancements, they lead to richer experiences that in turn lead to deeper engagement and that deeper engagement drives value for everyone in the ecosystem.

So with that, I'll pass it over to Christian to share more details about the numbers.

Daniel Ek: I'm seeing that the dynamics really are improving to Christian's earlier points. So as it's not yet, well, it's not just showing up in the top line. We are making progress. As you can see in the deck that we sent out, the transformation of the ads business is really growing, in particular in the new auction channels or biddable channels. And in Q3, we signed new DSP partnerships with Amazon and Yahoo. We also gave advertisers programmatic access to not just our audio inventory, but also our growing video inventory. So we are pushing hard to build for the long term. And while these changes will take some time, I do believe, though, yield significant results in the years ahead.

What's the extra development costs.

This wasn't worth it for us.

But we were able to drastically reduce these costs by leveraging AI, where we could actually translate our general iOS application. The T V O S.

This is interesting because it speaks to the waste that we're not really able to use AI to quite drastically accelerate our productivity and development.

Thanks Gustav and thanks everyone for joining us today. Let me cover the quarter for your results and then give some perspectives on our Outlook. So in quarter 3, meu, grew by 17 million, to 713 million in total exceeding our guidance by 30 3 million, we added 5 million, net subscribers, finishing at 281 million uh up 12% on an in line with guidance.

In last quarter's Q&A I talked a lot about how excited we are about AI in general and specifically the potential arrival of new form factors.

Total revenue was 4.3 billion and grew 12% year on year on a constant currency basis.

While there are lots of bold predictions out there, we think Spotify would benefit as products become even more media focused at the extent of new hardware expenses that are always in your ears and on your face.

premium Revenue, Rose 13% year on year on a constant currency, basis, driven primarily by subscriber growth

Bryan Goldberg: All right. Our next question comes from Deepak Mathivanan on price increases. Can you talk about the elasticity in consumer behavior you're seeing after recent price increases in markets like Australia where the magnitude was slightly higher? And what does it inform about potential in markets such as the US?

All right. Our next question comes from Deepak Mathivanan on price increases. Can you talk about the elasticity in consumer behavior you're seeing after recent price increases in markets like Australia where the magnitude was slightly higher? And what does it inform about potential in markets such as the US?

Our advertising business was consistent with prior year results on a currency neutral basis. And as expected, our automated ad sales channels saw strong growth in the quarter.

Perhaps you called a live demo on Spotify on meta AI latest meta rebounds at the recent developer event.

This integration allows users to connect stream and fully control Spotify.

And we're excited to be featured as an example of one of the new and one of the most requested innovations in this space.

On a like for like basis, excluding the near-term impacts from the optimization of our licensed podcast and the roll out of the Spotify partner program. We had a mid single digit constant currency advertising growth.

Daniel Ek: Well, Deepak, as you know, we don't discuss elasticity and specifics when it comes to pricing. What I can tell you and I want to reiterate is that price increases are part of our strategy. You've seen this over the last couple of years. Of course, we will continue to do so, but in a thoughtful way. This is always based on a number of different factors. The important thing is that we're committed to pricing that reflects the value that we provide. We've talked about it many times; Daniel mentioned it earlier. We've mentioned the VDP ratio that we want to balance over time. We will act when the time is right for each specific market. We'll do it at the appropriate price based on those market dynamics.

Then there is of course, our new partnership with <unk>.

And expect growth to improve in the back half of 2026.

This is another example of the ways, we're expanding our ubiquity strategy, helping users discover and engage with Spotify, a new waste wherever you are.

Once you've connected you're Spotify account to charity beauty, you can ask Jeff <unk> to create things like the perfect platelets for their countdown to your 2025 rapid experience.

Moving to profitability, gross margin came in at 31.6%, 50 basis. Points ahead of guidance and expanding roughly 50 basis points year in year.

Out outperformance here was primarily driven by changes in Prior, prior period, estimates for rights holder liabilities.

Maybe a play list with the Zen like vibe for when your in-laws come to visit for the holidays, whatever you think of.

Nearly all related to the first half of 2025.

Now I also want to highlight the features that we've previously announced that continues to gain popularity.

Excluding this amount of gross margin would have been modestly ahead of guidance due to content cost favorability.

The first is jam, which their friend listened together in real time.

We recently hit a 100 million monthly listening hours on them this quarter with over 200 million users sharing content monthly <unk>.

Bryan Goldberg: Okay. Our next question comes from Benjamin Black on our label relationships. You've now struck deals with all major labels from a high level. What do you think you've achieved? What added rights or added flexibility do you have? Do you still have the flexibility to pursue your non-music bundling strategy?

Okay. Our next question comes from Benjamin Black on our label relationships. You've now struck deals with all major labels from a high level. What do you think you've achieved? What added rights or added flexibility do you have? Do you still have the flexibility to pursue your non-music bundling strategy?

Operating income of 582, million was 97 million above forecasts of Which social charges had a positive impact of 41 million.

It's proven to be a big driver of both topline growth and retention.

And that was due to the share price movements as a reminder, we don't forecast, share price movements in our outlook for the business since they're outside of our control.

Listening to Spotify in cars is also outperforming every expectation that we had and it has become a huge part of users' daily engagement.

In fact, there are 245 million people now listening in cars, which is 34% of Mou and 15% of all consumption hours.

The remaining variants to guidance was driven by favorability in marketing timing and personnel and related expenses as well as the gross margin are performance.

Daniel Ek: Benjamin, typically, we don't discuss the specifics of these partnerships. But I wanted this time actually to give you a little bit more color. As you may have heard, we're about to conclude another renewal round with all of our partners. And this is a very significant moment for us. For the first time in our history, we've got new modernized deals in place with all of the top five US publishers. Now, these are new structures. They're true win-win deals that we built to address the core objective for both sides. And for our publishing partners, these agreements better recognize the value that songwriters create across our different offerings. For Spotify, to your specific question here, these deals secure broader video rights that we've long needed.

And <unk> just on the U S. This this puts US well ahead of all other subscription based audio services.

Finally free cash flow was 806 million and a quarter. We ended the quarter with 9.1 billion in cash and short-term Investments. And we repurchased.

So all of these features and enhancements they lead to Richard experiences that in turn leads to deeper engagement and that deeper engagement drives value for everyone in the ecosystem.

77 million in shares in quarter 3, year to date. And through November 3rd, we have repurchased, 410 million in shares,

So with that I'll pass it over to Christian to share more details about the numbers.

As we announced last quarter, our focus is to optimistically buy back shares primarily to offset the dilution of rising from our employee Equity programs.

Thanks, <unk> and thanks, everyone for joining us today, let me cover the quota for yourself and then give some perspectives on our outlook.

Quarter, three EMEA grew by 17 million to $713 million in total exceeding our guidance by $3 million. We added 5 million net subscribers, finishing at $281 million up 12% and in line with guidance.

If we then look ahead to guidance in quarter 4, we are forecasting, 745 million, Mao and increase of 32 million from quarter, 3, and 289 million subscribers.

Daniel Ek: This was a critical strategic objective for us because it unlocks our ability to innovate and launch more products and features that you've seen us rolling out, which in turn grows the entire pie for everyone. And it just positions us to make continued progress towards our longer-term business goals. I'm super excited to just expand these partnerships to the wider industry as well as we focus on building a great future for music.

Our subscriber Outlook implies net, additions of 8 million, which is slightly below prior year. Net ads due to the expected, small amount of churn. We see when we raise prices

Total revenue was $4 3 billion and grew 12% year on year on a constant currency basis.

Premium revenue rose, 13% year on year on a constant currency basis, driven primarily by subscriber growth.

This year we have new pricing and more than 150 markets versus 6 in the prior year.

Our advertising business was consistent with prior year results on a currency neutral basis and as expected our automated AD sales channels saw strong growth in the quarter.

In addition, we recently rolled out the enhanced free tier globally and we are encouraged by the early benefits. We're seeing to our funnel.

We viewed this business uh as set up well for conversion and continued health and subscriber growth in 2026.

Bryan Goldberg: All right. Our next question is going to come from Eric Sheridan on a follow-up on the advertising. Can you discuss the forward path, the revenue growth, and gross margin trajectory for your ad-supported efforts? How much is the current advertising environment weighing on your third-quarter reported revenue growth? And how do your new partnerships on the DSP side set the operation up for growth in 2026?

All right. Our next question is going to come from Eric Sheridan on a follow-up on the advertising. Can you discuss the forward path, the revenue growth, and gross margin trajectory for your ad-supported efforts? How much is the current advertising environment weighing on your third-quarter reported revenue growth? And how do your new partnerships on the DSP side set the operation up for growth in 2026?

On a like for like basis, excluding the near term impacts from the optimization of our licensed podcast and the rollout of the Spotify parking program, we had a mid single digit constant currency advertising growth.

We're also forecasting 4.5 billion in total quarter for Revenue. Representing an improved constant currency year-on-year growth rate of around 13% versus the 12%. We just delivered in quarter 3.

We continue to see 2025, as a transition year for ads business and expect growth to improve in the back half of 2026.

We also forecasting, a year-on-year arpa growth of around 2% on a constant currency basis.

Daniel Ek: Just let me go back a little bit to the answer we just gave, Eric. First of all, on the margin side, as I elaborated in our first question today, the advertising business is actually benefiting from the move of SBP into the premium side. That will continue through Q4. So starting Q1, we won't have that year-on-year benefit on the advertising margin. When it goes to the revenue side, I mean, and getting all these things in place, one of many things that we do this year to improve and drive the advertising revenue is to bring up the auction-based revenue. You see that, and Alex alluded to that. You can see that in our slides that it is actually growing healthy.

Moving to profitability gross margin came in at 31, 6% 50 basis points ahead of guidance and expanding roughly 50 basis points year on year.

We expect a quarter for gross, margin of 32.9% and operating income of 620 million.

Our outperformance here was primarily driven by changes in prior period estimates for rights holder liabilities.

In summary, we pleased with how the business is tracking into year end. As Daniel mentioned, we will continue to make investments to generate long-term growth and returns for the company.

Nearly all related to the first half of 2025.

Excluding these amounts our gross margin would have been modestly ahead of guidance due to content cost favorability.

While this can lead to quarter to quarter variability, in terms of marginal progression, we believe this is the right to purchase that sets us up well to advance towards a long-term goals.

Operating income of $582 million was $97 million above forecast of which social charges had a positive impact of $41 million.

And that was due to the share price movements. As a reminder, we don't forecast share price movements and our outlook for the business instead of outside of our control.

Turn into 2026. Why it's too early to provide guidance. I do want to point out that our first quarter growth margin. Typically sees a sequential step down from the fourth quarter from advertising seasonality and we expect the same for quarter 1:26.

Daniel Ek: It's more when that inflection point comes, when that growth actually surpasses the flatness or slight decline we have in the direct sales. We are not so much focused on the current ad environment because we have so much momentum in this transformation. So we feel very positive about the current situation that we will get into a healthy growth then in H2 2026.

The remaining variance to guidance was driven by favorability in marketing timing and personnel and related expenses as well as the gross margin outperformance.

Beyond this, we are confident in our path and expect 2026 to be another year of healthy revenue growth, disciplined investments, and margin and cash flow improvement.

With that, I'll hand it back to you, Brian.

Finally free cash flow was $806 million in the quarter, we ended the quarter with $9 1 billion in cash and short term investments.

And we repurchased.

Great. Thanks Christian. Again if you've got any questions, please go to slido.com. Hashtag Spotify earnings Q3 255. We'll be reading the questions in the order. They appear in the queue, with respect to how people vote up their preference for questions.

$77 million in shares in quarter, three year to date and prudent November 3rd we have repurchased $410 million in shares.

and our first question today is going to come from

Bryan Goldberg: Okay. Our next question comes from Michael Morris on video strategy. You've described video as a very exciting opportunity. In October, you agreed to license 16 of your own video podcasts to Netflix. How will this partnership enhance your video growth ambitions? And is there a risk that Spotify engagement declines or that Netflix builds its own competitor over time?

Okay. Our next question comes from Michael Morris on video strategy. You've described video as a very exciting opportunity. In October, you agreed to license 16 of your own video podcasts to Netflix. How will this partnership enhance your video growth ambitions? And is there a risk that Spotify engagement declines or that Netflix builds its own competitor over time?

As we announced last quarter, our focus is to Opportunistically buy back shares primarily to offset the dilution arising from our employee equity programs.

Jason helfin, on profitability. Can you talk through the puts and takes around gross margins across your premium and advertising segments in third quarter? And how should we think about gross margins in the fourth quarter and 2026?

If we then look ahead to guidance in quarter. Four we are forecasting 745 million Mou, an increase of $32 million from quarter, three and 289 million subscribers.

Gustav Söderström: Thanks, Michael. This is Gustav. I'll start here. As you said, we are indeed very excited about video podcasts, and SPP has driven significant interest from the creator community. We now have almost 500,000 video podcasts and shows on our platform. As you heard Alex mention, we're seeing meaningful uptake, more than almost 400 million, 390 million users stream the video podcast on Spotify, which is a 54% increase year over year. This is really working for us. The way to think about this is that we are building our experience better all the time on mobile, but also, as we talked about, on TV sets. If you think of this from a creator point of view, this gives us the ability to give creators a tremendous opportunity. This is a choice for creators. We don't decide for them where they want to be.

Our subscriber outlook implies net additions of $8 million, which is slightly below prior year net adds due to the expected small amount of churn we see when we raised prices.

This year, we have new pricing in more than 150 markets versus six in the prior year.

In addition, we recently rolled out enhanced free tier globally, and we are encouraged by the early benefits, we're seeing to our funnel.

We view this business.

As set up well for conversion and continued healthy subscriber growth in 2026.

We're also forecasting $4 5 billion in total quarter four revenue, representing an improved constant currency year on year growth rate of around 13%.

Is the 12%, we just delivered in quarter three.

Gustav Söderström: They can be on Spotify and any other platform. But now we can offer the creators the opportunity to be on Spotify, but also get distribution on Netflix, which is ultimately very good for podcasters. And it also gives us revenue opportunities. This is the way to think about it. It's part of our ubiquity strategy. And it's really important that while we build a good user experience, we also need to have a very strong creator offer. So this has severely strengthened our creator offering, which is why we're seeing this growth, where more and more creators want to be on Spotify with their video.

We're also forecasting a year on year ARPA growth of around 2% on a constant currency basis.

Level. But it actually, then dampens a bit, the the margin on the, um, premium side and improves it on the advertising side. As we started this in quarter 1 this year, it will come through all through the year and and therefore also impact quarter 4 in the same way.

We expect that quarter four gross margin of 32, 9% and operating income of $620 million.

All right, our next question is going to come from Jessica reif on superfan potential.

In summary, we are pleased with how the business is tracking into year end.

As Daniel mentioned, we will continue to make investments to generate long term growth and returns for the company.

The major record labels have hinted at. What's to come for a premium superfan tier? Will this product be created by the major labels for all dsps or will there be a Spotify specific product?

While this can lead to quarter to quarter variability in terms of margin progression. We believe this is the right approach that sets us up well to advance towards our long term goals.

I Jessica like I mentioned, uh, in in calls. I know in previous earnings calls, we keep a very high Bar for our products.

We simply ship products when they're ready.

Bryan Goldberg: We've got a related question from Rich Greenfield on the TV opportunity. We recently saw you updated your Apple TV app to make it far more video focused. How significant is TV-based usage to Spotify today as a percentage of overall usage? And how does it play into your video advertising aspirations?

We've got a related question from Rich Greenfield on the TV opportunity. We recently saw you updated your Apple TV app to make it far more video focused. How significant is TV-based usage to Spotify today as a percentage of overall usage? And how does it play into your video advertising aspirations?

Turning to 2026, why it's too early to provide guidance I do want to point out that our first quarter gross margin typically sees a sequential step down from the fourth quarter from advertising seasonality and we expect the same from quarter 126.

Um, but what I can tell you really is that we are in deep collaboration with most of the relevant rights holders um out there

Gustav Söderström: Thanks, Rich. So to back out, the reason we are building our TV experiences is that it's part of a ubiquitous strategy. What we've seen time and time again, and Alex has talked about this as well, is as soon as you start using Spotify in more situations, whether that's in the car, on desktop, on a TV, your usage goes up, your time spent, your active days per month goes up, and your retention goes up. So at the core of it, this is part of our retention and ubiquity strategy. Now, in terms of the opportunity, we think that we see really exciting engagement metrics. We're very happy with the usage. And we think we have plenty of room to grow in terms of users. So we're very excited about the usage. And we think we have a lot of room to grow on the amount of users.

Beyond this we are confident in our path and expect 26 to be another year of healthy revenue growth disciplined reinvestment and margin and cash flow improvement.

I'll hand, it back to you Brian.

Great. Thanks, Christian again, if you've got any questions. Please go to slide O Dot Com hashtag Spotify earnings Q3 25.

We'll be reading the questions in the order they appear in the queue with respect to help people vote up their preference for questions.

So, let me also just give you an example of why, this is a good strategy, um, you know, putting out on some Spotify on top of our, uh, premium subscription. So, a few months ago, we launched what we call audiobooks plus, um, which is a recurring option for people to use when they hit the wall of 15 hours, uh, in the, in the markets, where we have audio books, uh, the uptake on that specific add-on, subscription has been really, really good. What's more is that on top of that users are also buying top-ups. So really what we're seeing is uh our op levels that we've never seen before. So we really encouraged by this as we keep adding as we keep

And our first question today is going to come from.

Launching add-ons on, on other, uh, for other verticals in this part of the ecosystem.

Jason <unk> on profitability can you talk through the puts and takes around gross margins across your premium and advertising segments and third quarter and how should we think about gross margins in the fourth quarter and 2026.

Okay, our next question or a few questions here from Justin Patterson on AI. What impact do you believe AI will have on the music ecosystem and how does the chat GPT integration fit into that?

Thank you Jason Yeah. We are we're happy with margin expansion is happening for the company. This year and as you are pointing out there is a pressure more on the premium side than on the advertising side that is really nothing really to worry about we started this year by by letting them.

Gustav Söderström: Now, this obviously also helps advertising, but it's not the core reason we're doing it. The core reason is because ubiquity drives engagement that drives retention for us.

And in your collaboration with the labels, you also alluded to building products that create new revenue streams for the industry. Could you expand on what that means for royalties?

Daniel Ek: On a specific note, we heard your complaint on the Apple TV app. We hope you're happy, Rich. You can now use the new app.

And this is good stuff. Thanks Justin, I'll take that question. So there, there are a couple of questions in in here. I'll start sort of at the very high level of what it means.

No that we are moving.

Barring up the SPP program and moving over some of our <unk>.

Bryan Goldberg: Okay. We've got another question from Michael Morris on pricing. You recently raised prices in bundled service markets such as Australia and the UK. The increases in Australia were larger on a percentage basis than those in the UK. Why were the UK changes smaller? And do you expect future price increases to more closely look like those in Australia or those in the UK?

Okay. We've got another question from Michael Morris on pricing. You recently raised prices in bundled service markets such as Australia and the UK. The increases in Australia were larger on a percentage basis than those in the UK. Why were the UK changes smaller? And do you expect future price increases to more closely look like those in Australia or those in the UK?

Cast videos in podcast two to utilize that.

Content to give.

Uh, 1 way to think about it. It means that different things for us for a consumer. It means a couple of things. First of all, you should expect in general recommendations to just get a lot better as the industry including off switches to what is called generative recommended systems.

Give higher quality into the premium side and when we do that we recognize that cost now in premium instead of in advertising that shift that doesn't mean anything on a total company level, but it actually then dampened a bit the margin on the premium side and improves it on the advertising side as we started this.

Um, these are using generative AI to um understand much more of what the consumer is doing.

um, 1 way to think about this is that recommendations are moving from just

Daniel Ek: Thanks, Michael. So when we adjust prices in markets, we take into consideration a number of different factors. We look at things like household income. We look at things like maturity of the market. We look at things like specific value-to-price ratio if there's a specific different offering in that market. And all of this we take into account. And when the timing is right, we do it. And we do it in the magnitude that is right for that market.

In quarter, one this year it will come through all through the year and therefore also impact quarter four in the same way.

Alright. Our next question is going to come from Jessica Reif Ehrlich on superfan potential.

Looking at passive clicks and sales and so forth, we are actually understanding content and understanding you. Specifically, I'm very excited for us, even in understanding English. This is why you can talk to the Spotify DJ in English and it actually understands what you mean and can give you personalized recommendations. I think, if you play that out, what you should expect at a higher level is just much more.

The major record labels have hinted at what's to come for a premium superfan tier will this product be created by the major labels for all dsp's or will there be a spotify specific product.

Used to control what we internally, call personalization 2.0.

Where you can literally talk to Spotify as if it was a person and it understands your specific tastes.

Hi, Jessica like I mentioned.

Bryan Goldberg: All right. We've got time for a few more questions. We've got a follow-up one from Deepak Mathivanan. Gustav, AI models are getting much better in formats like video and audio. As a platform, do you see opportunity for Spotify to help artists with AI tools for their music creation process? And can you talk about Spotify's strategy to enable AI tools for creators?

All right. We've got time for a few more questions. We've got a follow-up one from Deepak Mathivanan. Gustav, AI models are getting much better in formats like video and audio. As a platform, do you see opportunity for Spotify to help artists with AI tools for their music creation process? And can you talk about Spotify's strategy to enable AI tools for creators?

And in calls and in previous earnings calls, we keep a very high bar for our products.

So you can tell Spotify that you're actually tired of this specific genre now and you want to listen to something new that we have never seen in your listening data. So we could never predict it but you can tell us

We simply ship products when they are ready.

But what I can tell you really is that we are in deep collaboration with most of the relevant rights holders out there.

This is what you should expect different level of personalization, different level of user control.

Um,

Let me also just give you. An example of why this is a good strategy.

on chat TTS specifically, this is part of our Ubiquiti strategy.

Add ons on Spotify on top of our opinion.

Gustav Söderström: Thanks, Deepak. Certainly we do. This is what I mentioned previously when we talked about the industry initiatives. What we think is important is that someone does this in a way where artists in the music industry can get to participate and to choose if they want to use these tools. There's obviously a lot of excitement, but also a lot of fear around these tools. We are trying to be the ones who do this responsibly. We're very excited about that. I don't want to talk more about the specifics at this time, but that's what we're trying to do. It's also important to remember that it's not only for music. We think AI tools are also very helpful for podcasters and for authors. We want to help all creators with these kinds of tools.

Friction for a few months ago, we launched what we call audio books plus.

Which is a recurring option for people to use when they hit the wall of 15 hours in there in the markets, where we have audio books.

The uptake on that specific add on subscription has been really really good what's more is that on top of that users are also buying top ups. So really what we're seeing is ah.

One way to think about Spotify is that we've always tried to be where the users are. If the users are on Sonos, we're on Sonos. If they're in the car, we're in the car. If they're on Google searching for music, we're on Google, and a lot of people are on ChatGPT. So, of course, we're going to be in chat. What's exciting about this is that you can do more than on many of the other platforms that we integrated into.

<unk> levels that we've never seen before but we're really encouraged by this as we keep adding as we keep launching add on some other further verticals in this part of ecosystem.

And our next question or a few questions here from Justin Patterson on AI.

What impact do you believe AI will have on the music ecosystem and how does the chat GPT integration fit into that and.

The beautiful thing about chatbot is that you can combine the power of chatbot to understand the world and use cases with Spotify understanding you. So now you can ask for a playlist related to something that happened in the world but instead of that playlist, just being the same for everyone on chat TV. It's also going to understand your Spotify user taste and make it personal to you. This combination has never been possible before.

Bryan Goldberg: Okay. Our next question is from Batya Levi on engagement. Can you talk about the impact on engagement and conversion to paid from the enhancements added to the free tier? How should we think about impact on margins and monetization opportunities down the road?

Okay. Our next question is from Batya Levi on engagement. Can you talk about the impact on engagement and conversion to paid from the enhancements added to the free tier? How should we think about impact on margins and monetization opportunities down the road?

And in your collaboration with the labels you also alluded to building products that create new revenue streams for the industry could you expand on what that means for royalties.

Uh, and on your uh, last question of um products that we build with the industry.

the way we think about this and and, um,

This is good stuff. Thanks, Justin I'll take that question. There are a couple of questions in here I'll start sort of at a very higher level of what it means.

Daniel Ek: Thanks, Batya. First of all, the process is working. We're taking share even in the most competitive markets. And since you kind of asked, here comes a mini sermon on subscriptions growth from me to you. So the key to subscriptions growth is really a strong funnel. And to build a strong funnel, you need really three things. One is, of course, engagement. And we've talked about that earlier in the call. And our engagement, the listening hours on Spotify, and also the active days that Gustav spoke to, they're growing. And they're growing thanks to the numerous product launches that we have. This means that we keep people on the platform, which is, again, very important for a strong funnel. Now, the second thing that's important is that when we adjust prices, when we raise prices, you need minimal churn. And that's also what we're seeing.

Uh generative AI for music is that just as with piracy, we think someone needs to work with the industry and with the artists to make this technology available for them in a legal way where we don't ask for forgiveness.

One way to think about it means different things for us for a consumer it means a couple of things first of all you should expect in general recommendations to just get a lot better as the industry, including us switches to what is called generative recommended systems.

And where artists can actually participate and make money. That's why we're doing this.

Okay, our next question is from Eric Sheridan on video strategy.

Diesel.

These are using generative AI to understand much more of what the consumer is doing.

Potential implications of your partnership with Netflix for video, podcasts of the ringer. How does this impact your overall strategy with respect to driving more video consumption on the platform?

A good question, Eric? Um,

One way to think about this is that recommendations are moving from just.

so,

At the heart of it is that we believe in being creative first.

Looking at passive clicks and saves and so forth, Berkshire understanding content and understanding you and specifically and very exciting for us even understanding English. This is why you can talk to the Spotify D J.

Uh, so what we think is that

When the Creator wins, we win.

Daniel Ek: Third of all, and then to your point, a specific question is about intake. For healthy subscription growth, you need a good replenishment of MAU. As you can hear us talk about this quarter, that really is the standout number. Our MAU is increasing to higher levels than we expected. As MAUs grow, we also see engagement grow. As the engagement of the MAUs grow, we typically see much higher levels of conversion. Every time that we've made a change to a free product and it's generated more MAU in the history of Spotify, it's led to more business growth down the line. So we just have to trust the funnel.

Um and as creators optimized to create their best shows and interviews, which is really what they're focused on, um, they wanted to send Syndicate to everywhere.

In English and it actually understands what you mean and can give you personalize recommendations and I think if you play that out what you should expect a higher level is just much more use of control what we internally called personalization to know where you can literally talk to Spotify as if it was a person understands your specific tastes.

And we believe, of course in helping them to reach audiences in as many places as possible. Um,

Uh, which is consistent with our core philosophy on on being created first. And also, of course, to help them monetize as much as possible.

You can tell Spotify that youre actually tired of this specific genre now and you want to listen to something new that we have never seen and you're listening data. So we can never predict it well you can tell us.

So the partnership with Netflix that you're asking about, is is uh, is really meaningful opportunity for both of these beliefs and just a natural extension of our ecosystem. Um, and

What's more is that we're already seeing some strong interest uh from creators who want to use Spotify as sort of their Distribution Hub, if you will?

This is what you should expect different level of personalization different level I'm used to control.

On <unk> specifically this is part of our ubiquity strategy.

One way to think about Spotify is that we've always tried to be where the users are if the users are on on the <unk> within the car when the car Theyre on Google searching for music, we're on Google and a lot of people are in <unk>. So of course, we're going to be <unk>. What's exciting about this is that you can do more than on many of the other platforms that we.

Bryan Goldberg: All right. Our last question today is going to come from Jason Bazinet. You've taken some price increases in a few markets, but the price gap between Spotify and rivals varies by market. Can you talk about your philosophy regarding price increases? And specifically, what metrics give you more confidence to price the service well above versus just above your competitors?

All right. Our last question today is going to come from Jason Bazinet. You've taken some price increases in a few markets, but the price gap between Spotify and rivals varies by market. Can you talk about your philosophy regarding price increases? And specifically, what metrics give you more confidence to price the service well above versus just above your competitors?

And to your second question, more specifically typically. Um, you know, when we, uh, have shows that originated on Spotify, we put them on YouTube, historically, that's just been driving even more awareness about the show, uh, and, and we're originated and, and typically what we see is just net, incremental usage on Spotify coming from that. So very encouraged and very exciting to have this new Netflix partnership being rolled out as we speak.

Okay, next question. From Rich Greenfield on premium conversion.

Got it in.

The beautiful thing about <unk> is it you can combine the power of chats EBT to understand the world and use cases with Spotify understanding you. So now you can ask for a play list related to something that happened in the world, but instead of that playlist just being the same for everyone on chat TBD. It's also going to understand your Spotify.

Daniel Ek: Thanks, Jason. Well, the answer is sort of embedded in a part of your question here. We pay attention to competition. But what we pay most attention to is obviously our own offering. And we care a lot about the value-to-price ratio. You've heard Gustav talk about how we've shipped much faster in this last quarter. There's more than 30 features that have been shipped in the product. And users are loving it, right? So the important thing for us is just keep continuing to improve the value-to-price ratio, meaning raising value and relentlessly just build the best product out there. The best product will always win. And then when we look at our product and the value that it reflects, we will then take steps to understand if we need to adjust the price or not.

And your Instagram posts Gustav mentioned that free users liked the recent upgrades uh to their free functionality. Have you seen any changes to the rate of upgrade from free to premium as a result?

A user tastes and make it personal to you. This combination has never been possible before.

And on your last question of.

Thank you, Rich. Yeah, we are excited by all the features. We we launched and we hope several of you are excited about specifically the Apple TV features as well. Uh, what we see is indeed more, uh, usage. And the way to think about Spotify is that you have a few proxies for what is ultimately,

Products that we build with the industry.

The way we think about this.

Generative AI for music is that just as with piracy, we think someone needs to work with the industry and with the artist to make this technology available for them in a legal way, where we don't ask for forgiveness, and where artists can actually participate and make money. That's why we're doing this.

Retention and subscription value and it is more usage and specifically more um usage uh more days of the month, uh which we call Active days.

And so, what we try to optimize for is.

Uh, more engagements per day but specifically also more days per month.

Daniel Ek: Again, like I said many times before, it's based on specific market dynamics.

Okay. Our next question from Eric Sheridan on video strategy.

Gustav Söderström: Some of the things that give us confidence is, as we've said many times, engagement, day spent per month, where we know that we are well, well ahead of our competitors.

Can you discuss the potential implications of your partnership with Netflix for video podcasts of the Ringer. How does this impact your overall strategy with respect to driving more video consumption on the platform.

And we know over time, that this simply leads to more more conversion. In fact, we call in the phrase many years ago. That is, uh, that says the more you play, the more you pay eventually, uh, which is why we always try to maximize engagement, both in the free tier, and in the paid tier

Daniel Ek: Maybe just an addition from my side too. I think implied in the question is that perhaps there's a comparison of music to music competitors. But in many markets where we act now, Spotify is not just a music service anymore. It is a music podcast and an audiobooks service. In some markets, we haven't yet gotten to with our audiobooks offering. So as you look at our pricing, we are factoring in the value, not just in music, but in all of the verticals that we act as well. And I think this is an important addition to add because in a lot of the markets, their perception of what Spotify is is just very different than what it is in other markets as well.

Uh so we are very certain that this will go the way it's always gone. People are using the service more which is going to create more goodness for us. Both free and paid in the future.

Good questions Eric.

So at.

At the heart of it is that we believe in being creator first.

So what we think is that.

When the creator wins, we win.

And as creators optimized to create their best chosen and interviews, which is really what they're focused on.

Okay, we got another question from Jessica, reif Erik this time on, uh, the leadership transition, Gustav and Alex as you prepare to take over as co-ceos and January, what are you most excited about and your respective areas?

Wanted to syndicate everywhere.

And we believe of course and helping them to reach audiences in as many places as possible.

Which is consistent with our core philosophy on being created first and also of course to help them monetize as much as possible.

Partnership with Netflix that you're asking about is is it's really meaningful opportunity for both of these beliefs and just a natural extension of our ecosystem.

Uh, thanks for that Jessica. I'll start good stuff. And then you can, you can chime in I uh, I'm honestly really excited because I know that the ambition level is is going up. Um and this has been the case. We've always had an increasing ambition level of spotify and um you know we have this just amazing platform.

And.

Bryan Goldberg: All right. Great. Thanks, everyone, for the questions. That concludes the Q&A session today. I want to hand the floor back over to Daniel for some closing remarks.

All right. Great. Thanks, everyone, for the questions. That concludes the Q&A session today. I want to hand the floor back over to Daniel for some closing remarks.

And what's more that we're already seeing some strong interest from creators who want to use Spotify as sort of their distribution hub if you will.

Daniel Ek: All right. Thanks, Bryan. Well, I think the headline here is quite simple. The business is healthy. We're shipping faster than ever. We have all the tools we need. We have pricing, product innovation, operational leverage, and eventually the ads turnaround to deliver both revenue growth and profit expansion. I said earlier, it all comes back to user fundamentals. That's where we are. 700 million users who keep coming back, engagement at all-time highs. We're building Spotify for the long term. As I transition to Executive Chairman, I couldn't be more confident in what's ahead. Alex and Gustav have been instrumental in getting us here. I'm excited to watch them take Spotify to the next level. Thank you, everyone, for joining today.

And to your second question more specifically typically.

When we.

Have shows that originate on Spotify, we put them on Youtube historically, thats just been driving even more awareness about the show.

And where it originated in and typically what we see is just net incremental usage on Spotify coming from that so very encouraged and very exciting to have this new net Netflix partnership being rolled out as we speak.

Uh, the user fundamentals are, you know really firing in all cylinders. Daniel spoke to this, in his remarks, with that, we sort of have. And we have, you know, the the, the 3 vertical that we have out there right now, all of which are are, you know, producing results. Um, and so, we really have a platform to stand on that we can, we can leverage to to fulfill these new Ambitions. And as you as you heard of, uh, talk about before, um, you know, we we now hit roughly 3% of the world's population. 3% of the world's population is subscribing to Spotify on a recurring basis every month they come back.

Okay next question from rich Greenfield on premium conversion.

And your Instagram posts Gustaf mentioned that free users like the recent upgrades to their free functionality have you seen any changes to the rate of upgrade from free to premium as a result.

Thank you rich yeah. We are excited by all the features we we launched and we hope several of you are excited about specifically the Apple TV features as well.

And with these 3 verticals really have like a very expansive time. We believe that you know, most of the people in the world are interested in music. Most of people in the world are interested in in uh, in in even the more expansive stuff like books and podcasts and, and video on top of that. Um, so this this just puts us in a very good position to

Bryan Goldberg: Okay. That concludes today's call. A replay will be available on our website and also on the Spotify app under Spotify Earnings Call Replays. Thanks, everyone, for joining.

Okay. That concludes today's call. A replay will be available on our website and also on the Spotify app under Spotify Earnings Call Replays. Thanks, everyone, for joining.

To to to fulfill this new ambition of of getting to a billion subscribers.

Yeah, I'm very excited.

What we see is indeed more usage and the way to think about Spotify as that you have a few proxies for what is ultimately.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

So I I'll fill in um and in a way uh nothing has changed uh in terms of why I'm excited. Uh but in a way, some things are actually new.

Retention in subscription value and it is more usage and specifically more.

Usage more days of the month.

Which we call active days and.

So what we try to optimize for us.

so I've I've managed to to be excited about Spotify for over 17 years and the reason I've been excited about Spotify for 17 years is still the same which is what Daniel mentioned initially that if you just look at the opportunity,

More engagements per day, but specifically also more days per month and.

And we know over time that there's simply leads to more more conversion in fact, we coined the phrase many years ago that has that says the more you play the more you pay eventually.

Probably the single biggest time you can find.

I think it's even bigger than social networking or anything. There's no 1 in the world that really doesn't like music at all.

Which is why we always try to maximize engagement both in the free tier and in the paycheck.

So it is the sort of the biggest time you can participate in

and,

So we are very certain that this will go the way. It's always gone people are using the service more which is going to create more goodness for us both free and paid in the future.

<unk> got another question from Jessica Reif Ehrlich. This time on the leadership transition through southern Alex as you prepare to take over as co Ceos in January what are you most excited about in your respective areas.

That's been the case for a long time. What is specifically exciting for me right now is that we are in 1 of these big macro shifts. Um, the AI macro shift that is, I've said this before but it's for me, certainly the most exciting since the smartphone came along.

And so if you look at those 2 together, when you enter, 1 of these macro shifts where you know, from a product point of view and I'm a product guy.

Thanks for that Jessica I'll start goes down and then you can come in.

You're going to get to renovate things and things are going to change. You kind of want to be in a position where the time is really big. You have a strong healthy company with a lot of talented people behind you.

I'm honestly really excited because I know that the ambition level is going up.

So, that's exactly where I find myself right now.

That's why I'm excited.

And this has been the case have always had an increasing ambition level at Spotify and we.

Now we have this just amazing platform.

The user fundamentals are.

Really firing in all cylinders Daniel spoke to this in his remarks.

With that we sort of have and we have that.

All right, we've got a related question from Justin Patterson on uh time spent. You've often talked about a tam in the billions of users. How do you think about the time spent opportunity for music and non-music content given new categories like audio books that have been additive to listening hours?

The three verticals that we have out there right now all of which are producing results.

And so we really have a platform to stand on that we can we can leverage to fulfill these new ambitions and as you as you heard us talk about before.

We now have hit roughly 3% of the world's population, 3% of the world's population is subscribing to Spotify in a recurring basis every month they come back.

Yeah um Justin. So I you know I I think much of it has been said, already by both Gustav and Alex around the time and the opportunity, but I guess maybe to take a step back. And what I think is more important like what is the superpower of this company? And I think the superpower of this company is really in into mix between building, great product experiences.

And with these three verticals really have like a very expansive Tam we believe that most of the people in the world.

Our interest in music most of people in the world are interested in and even the more expensive stuff like books and podcast and video on top of that.

So this this just puts us in a very good position to do.

To fill fulfill this new ambition of getting to 1 billion subscribers.

And.

So I'll fill in.

And in a way.

Nothing has changed in terms of why I'm excited but in a way. It's some things are actually new.

So I managed to to be excited about Spotify for over 17 years and the reason I've been excited about for 2017 years is still the same which is what Daniel mentioned initially that if you just look at the opportunity.

Music, specifically, but also podcasts and books of music specifically is probably the single biggest Tam you can find.

And figuring out how to monetize those product experiences at a level which is different from almost any other platform because the reality is we deal with a lot of professional content where there's an expectancy for us to figure out monetization from the start. It's not something we can wait for, and figure out in a few years. So that's really the superpower of this company and when you then look at that, from a tam not necessarily in numbers of users. But in time spent it turns out that there's all of this amazing, uh, content that's out there, all of these amazing. Um, you know, experiences that are out there that for whatever reason, may not yet, be at a user experience, that is attractive to people or at a price point that makes it accessible to people. And when you think about Spotify, that's really been at the intersection where we've been innovating and I think, uh, not only did we do that for music. Um, not only did we do that for podcasting, but I think with audiobooks

I think it's even bigger than social networking or anything there's no one in the world that really doesn't like music at all so it is sort of the biggest Tam you can participate in.

That's certainly been our bat too. Which is we just think that there is a lot more people that cares about audiobooks than what the market was showing at the time and that's part user experience and it's part of business models.

<unk>.

That's been the case for a long time, but what is specifically exciting for me right. Now is that we are in one of these big macro shifts there.

A macro shift that as I've said this before but it's for me certainly the most exciting since the smartphone came along.

And so if you look at those two together when you enter one of these macro shifts where you know from a product point of view and I'm a product guy.

Youre going to get to renovate things and things are going to change you kind of want to be in a position where the Tam is really big you have a strong healthy company with a lot of talented people behind you.

So that's exactly where I find myself right now.

That's why I'm excited.

Now it it it turns out that there's plenty of other things out there that has considerable time. Spent that also doesn't necessarily have the right user experience nor the right business model and when you add AI to the mix of that, uh, there's that's a foundational technology that's going to be enabled. Totally new user experiences and business models too. So we're really excited about it. And I think, you know, when you look at sort of the AI world at the moment, uh, of course it's the foundational, uh, models and you have the sort of core, um, um, you know, a, um, um, assistant models that are doing incredibly well.

We've got a related question from Justin Patterson on time spent.

You've often talked about the Tam and the billions of users. How do you think about the time spent opportunity for music and non music content, given new categories like audio books that have been additive to listening hours.

But we aren't yet. Seeing a lot of these entirely new consumer experiences in AI, having Mass attraction, but we think that there will be of the coming uh years and we think we are um have the opportunity of being a net beneficiary of that.

Yeah, Justin so.

Okay, our next question is from Rich Greenfield on Advertising.

I think much of it has been said already by both Gustave <unk>, Alex around the Tam and the opportunity, but I guess, maybe to take a step back and what I think is more important like what does the superpower of this company.

I think the superpower of this company is really in the into mix between building great product experiences.

Looking at a 2-year stack of advertising Revenue growth. FX neutral you've decelerated from 31% in the third quarter of 2024 to 7% in the third quarter of 2025 and you've repeatedly talked to softness in pricing over the past several quarters, how do you return to robust add growth

And figuring out how to monetize those product experiences at a level, which is different from almost any other platform. Because the reality is we deal with a lot of professional content, where theres an expectancy for us to figure out monetization from the start it's not something we can wait for the figure out in a few years.

So that's really the superpower of this company and when you then look at that from a Tam not necessarily in numbers of users, but in time spent it turns out that there's all of these amazing.

Um thank you Rich for the question and let me start Christian here and then I hand over to you, Alex. If you want to pitch in something I am. You are completely right. I mean we have a like for like um uh single digit growth now amidst in single digit growth now in the quarter free and and we came from a much better position before when it come came to Google growth levels. Uh, we did set a new long-term strategy that we believe in and we are very we will succeed with it's not it's not um,

Content that's out there all of these amazing.

Experiences that are out there that for whatever reason may not yet be at a user experience that is attractive to people or at a price point that makes it accessible to people and when you think about Spotify, that's really been at the intersection where we've been innovating I think not only did we do that for music.

Not only did we do that for podcasting, but I think with audiobooks. That's certainly been our back to which is we just think that there is a lot more people that cares about audiobooks than what the market was showing at the time and Thats part user experience and it's part business model.

Now.

It turns out that there is plenty of other things out there that has considerable time spend that also doesn't necessarily have the right user experience, nor the right business model and when you add AI to the mix of that.

Amount that it it compensates for the direct sales. And that needs then a little bit more of the dsps. Now, we have Amazon Yahoo coming on board in quarter 3 and and to be on board and and add value. And then also, the customers to shift more into the programmatic sales and that is, that is progressing. Well. Um, but inflection point is a little bit further out than we expected, uh, before quarter 2. But as I said in my my remarks also, we see that that we're expecting to be back on the growth uh, that we want in the second half of 2026. I don't know if you want to add something there, Alex Rich, my friend. I'll add something to this.

um, so when it comes to add sales,

That's a foundational technology, that's going to be enable totally new user experiences and business models to do it.

Really excited about it and I think when you look at sort of the AI world at the moment of course, it's the foundational models and you have the sort of core.

It's a question of when not if not if it's going to happen, right? We we, um, remain confident in the long term strategy that we put in place and I'm seeing that the Dynamics really are improving to to Christians early points.

A M.

Assistant models that are doing incredibly well.

But we arent yet seeing a lot of these entirely new consumer experiences in AI, having massive traction, but we think that there will be over the coming years and we think we are.

<unk> had the opportunity of being a net beneficiary of that.

Okay. Our next question is from rich Greenfield on advertising.

Uh, so as it's not yet, well it's not just showing up in the Top Line, we are making progress as you can see in the deck that we sent out. Um, the transformation of the ads business is, is really growing. In particular, in the new auction channels, a biteable channels. Uh, and in Q3 we signed new DSP Partnerships with Amazon and Yahoo, we also gave advertisers, uh, programmatic access to not just our audience inventory but also our growing video inventory. So we are pushing hard to build for the long term. And while these changes um, yeah, it will take some time. I do believe though. Yield significant results in the years ahead.

Looking at a two year stack of advertising revenue growth FX neutral you have decelerated from 31% in the third quarter of 2024% to 7% in the third quarter of 2025, and you've repeatedly talked to softness in pricing over the past several quarters. How do you returned to robust ad growth.

All right, our next question comes from DAC. Medan on price increases. Can you talk about the elasticity and consumer Behavior? You're seeing after recent price increases in markets like Australia, where the magnitude was slightly higher? And what does it inform about potential in markets such as the US?

Thank you rich for the question and let me start Christian here, and then I'll hand over to you Alex if you want to pitch in something.

You are completely right I mean, we have a like for like.

Single digit growth now in mid single digit growth now in quarter, three and we came from a much better position before when it came to growth levels.

We did set a new long term strategy that we believe in and we are very confident that we will succeed with is not is not.

If it's win and we.

We came out there in quarter, two and express to progress and said that we had a little bit behind and we need a little bit more time, but we do see really good progress on the programmatic side and the question is when that the programmatic side is then.

I'll be back. Um, as you know, we don't discuss um, elasticity and specifics when it comes to pricing. But what I can tell you, and I want to reiterate, is the price increases are part of our strategy. You've seen this over the last couple of years, and of course, we will continue to do so, but in a thoughtful way and this is always based on a number of different factors. Um, the important thing is that we're committed to pricing that reflects the value that we provide and this, we've talked about many times Daniel mentioned it earlier, uh we uh uh We've mentioned the VDP ratio that, you know, we want to balance over time and we will act on the time is right for each specific market and we'll do it at the appropriate price based on those market dynamics.

Growing so much in the amount that it compensates for the direct sales and that needs then a little bit more of the DSP is now we have amazonia, who coming onboard in quarter, three and to be onboard and add value and then <unk>.

Okay, our next question comes from Benjamin black.

So the customers to shift more into the programmatic sales and that is that is progressing well, but the inflection point is a little bit further out than we expected.

On our, uh, label relationships. You've now struck uh, deals with all major labels from a high level. What do you think? You've achieved? What added rights or added flexibility? Do you have and do you still have the flexibility to

Uh, pursue your non-music bundling strategy.

For quarter, two but as I said in my remarks also we see that that we're expecting to be back on the growth that we want in the second half of 2026 I don't know if you want to add something there Alex Rich my friend I'll add something to this.

So when it comes to AD sales it's.

It's a question of when not effort not if it's going to happen.

For Benjamin, typically, we don't discuss the specifics of these Partners, but I wanted this time, I actually gave you a little bit more color. Um, as you may have heard, we're about to conclude another renewal round with, uh, all of our partners. And this is a very significant moment for us for the first time in our history. We've got new modernized deals in place with all of the top 5 us publishers.

We remain confident in the long term strategy that we put in place and I'm seeing that the dynamics with our improving to Christians earlier points.

And these are new structures. They're true, win-win deals um that we built to address the core objective for both sides.

So as it is not yet while it's not showing up in the top line, we are making progress as you can see in the deck that we sent out the transformation of the ads business is really growing in particular in the new auction channels available channels.

And in Q3, we signed new DSP partnerships with Amazon and Yahoo. We also gave advertisers programmatic access to not just our audio inventory, but also our growing video inventory and we are pushing hard to build for the long term and while these changes.

And for our publishing Partners, these agreements sort of better recognize the value that songwriters create across our different offerings for Spotify to your specific question here. These deals secure uh broader video rights that we've long needed. Uh, this was a critical strategic objective for us because it unlocks our ability to innovate and launch more products. And and features that you've seen us rolling out which in, turn grows the entire Pi for everyone and it's just positions us to make continued progress towards um, our longer term business goals.

Yes, it will take some time I do believe though yield significant results in the years ahead.

um, I'm super excited to just expand these Partnerships to The Wider industry as well as we focus on building a

Uh, a great future for music.

Alright. Our next question comes from Deepak <unk> on price increases can you talk about the elasticity and consumer behavior, you're seeing after our recent price increases in markets like Australia, where the magnitude was slightly higher and what does it inform about potential in market such as the U S.

All right, our next question is going to come from Eric Sheridan on uh a follow-up on the advertising. Can you discuss the forward path to revenue growth and gross margin trajectory for your ad supported efforts?

I'll be back.

As you know we don't discuss.

The city and specifics when it comes to pricing and what I can tell you and I want to reiterate is that price increases are part of our strategy you've seen this over the last couple of years and of course, we will continue to do so but in a thoughtful way and this is always based on a number of different factors.

The important thing is that we're committed to pricing that reflects the value that we provide and we've talked about many times Daniel mentioned it earlier.

<unk>.

We've mentioned the VIP ratio that we want a balance over time.

And we will act on the time is right for each specific market and we'll do it at the appropriate price based on those market dynamics.

Okay. Our next question comes from Benjamin Black.

On our label relationships, you've now struck deals with all major labels from a high level. What do you think you've achieved what added rights or added flexibility do you have do you still have the flexibility to.

Pursuing your non music bundling strategy.

Benjamin typically we don't discuss the specifics of these partners, but I wanted this time actually give you a little bit more color.

As you May have heard we're about to conclude another renewal roundwood.

All of our partners and this is a very significant moment for us for the first time in our history, we've got new modernized deals in place with all of the top five U S publishers.

Fit on the advertising margin. And and when it goes to the the revenue side, I mean and getting all these things in place 1, 1 of many things that we do this year to improve and and drive the advertising revenue is to, to bring up the auction based revenue and and you see that and Alex alluded to that. You can see that in our slides that it is actually growing healthy and it's it's uh it's more when that inflection point comes when that growth actually surpasses. Uh, the flatness or or slight decline, we have in the direct sales. We um, we are not so much focused on the current ad environment because we have so much momentum in this transformation. Um, so we feel very positive about uh, with with current situation that we will get into uh, A Healthy Growth then in the second half of 2026,

And these are new structures, a true win win deals that we built to address the core objective for both sides.

And for our publishing partners these agreements to better recognize the value of that song writers create across our different offerings.

Okay, our next question comes from Michael Morris on video strategy. You've described video as a very exciting opportunity in October. You agreed to license 16 of your own video, podcasts to Netflix, how will this partnership? Enhance your video growth Ambitions and is there risk that Spotify engagement declines or that Netflix builds its own competitor over time?

Spotify to your specific question here is the secure broader video rights that with long needed.

This was a critical strategic objective for us because it unlocks our ability to innovate and launch more product and features that you've seen is rolling out which in turn grows the entire pie for everyone.

<unk> positions us to make continued progress towards our.

Our longer term business goals.

I'm Super excited to expand these partnerships with a wide industry as well as we focus on building a.

Thanks Michael. Uh, this is Gustav. I'll start here as you said, we are indeed very excited about video podcast and SPS driven significant interest from the creative community. And we now have old 500,000 video podcasts and shows on our platform. And as you heard Alex mentioned, uh, we're seeing meaningful uptake more than almost 400 million, 390 million users stream, the video podcast on Spotify, which is a 54% increase year-over-year. So this is really working for us. The, the way to think about this is that

A great future for music.

Alright. Our next question is going to come from Eric Sheridan on.

uh, we are building our experience, um, better all the time, you know, on mobile but also as we talked about on TV sets,

A follow up on the advertising can you discuss the forward path to revenue growth and gross margin trajectory for your AD supported efforts.

How much is the current advertising environment weighing on your third quarter reported revenue growth and how do your new partnerships on the DSP side set the operation up for growth in 2026.

Let me go back a little bit to that as we just gave them Eric.

First of all on the on the margin side as I elaborated in our first question today. The advertising business is actually benefiting from the move of SPP into the premium side and that will continue through quarter. Four so start in quarter, one we won't have that year on year.

Benefit on the advertising margin.

But if you think of this from a creative point of view, this gives us the ability to give creators a tremendous opportunity. This is a choice for creators, we don't decide for them where they want to be. They can they can be on Spotify and any other platform, but now we can offer the creators the opportunity to be on Spotify. But also get Distribution on Netflix, which is ultimately very good for, for podcasters, and it also gives us Revenue opportunities. So this is the way to think about it. It's part of our Ubiquiti strategy and it's really important that what we build a good user experience. We ALS need to have a very strong Creator offer. So this is has a severely, strengthen our creator offering which is what we're seeing this growth. Well more and more creators want to be on Spotify with their video.

And when it goes to the revenue side, I mean and getting all these things in place one one of many things that we do this year to improve and drive the advertising revenue is to bring up the auction based revenue and you see that and Alex alluded to that you can see that in our slides that it is actually growing healthy and it.

We've got a related question from Rich Greenfield on the TV opportunity. We recently saw you updated your Apple TV app to make it far. More video focused. How significant is TV based usage to Spotify today as a percentage of overall usage and how does it play into your video advertising aspirations?

It's a it's more when that inflection point comes when that growth actually surpasses.

The flatness or slight decline we have in the direct sales.

We are not so much focused on the current AD environment, because we have so much momentum in this transformation. So we feel very positive about.

Thanks Rich, I'll take this as well. So to back out the reason we are building our TV experience. This is that um it's part of your Ubiquiti, what? We've seen the time and time again. And Alex has talked about this as well is

With current situation that we will get into a healthy growth down in the second half of 2026.

As soon as you start using spotify and more situations, whether that's in the car on desktop on a TV, your usage goes up, your time, spent, uh, your, um, active device per month, goes up and your retention goes up. So at the core of it, this is part of our, our retention and ubiquity strategy.

And our next question comes from Michael Morris, Our video strategy. You've described video is a very exciting opportunity and in October you agreed to license 16 of your own video podcasts Netflix how will this partnership enhance your video growth ambitions and is there risk that Spotify engagement declines where that nets.

<unk> builds its own competitor over time thanks.

Thanks, Michael This is Gustavo I'll start here as you said, we are indeed very excited about video podcasts and has driven significant interest from the creative community and we now have olds 500000 video podcast shows on our platform and as you heard Alex mentioned we're.

Now in terms of the opportunity, we think that we see really exciting engagement metrics, we're very happy with the usage and we think we have plenty of room to grow in terms of users. So we're very excited about the usage and we think we have a lot of room to grow on the amount of users. Now, this obviously also helps advertising but it's not the core reason we're doing it. The core reason is because Ubiquiti drives engagement that drives retention for us.

And on a specific note. Uh we heard your complaints on the Apple TV app. So we hope you're happy Rich. So you can now use the new app.

We're seeing meaningful uptake more than almost 400 million 390 million users streaming video podcasts, Spotify, which is a 54% increase year over year, but this is really working for us.

Way to think about this is that.

We are building our experience.

Better all the time on mobile, but also as we've talked about on television sets, but if you think of this from a creative point of view. This gives us the ability to give creators a tremendous opportunity. This is a choice for creators we don't decide for them, where they want to be they can they can be on Spotify and any other platform, but now we can offer.

Okay, we've got another question from Michael Morris on pricing. Uh you recently raised prices in bundled service markets uh such as Australia and the UK, the increases in Australia were larger on a percentage basis than those in the UK. Why were the UK changes smaller? And do you expect future price increases to more closely look like those in Australia or those in the UK?

Um, thanks Michael.

<unk> the opportunity to be on Spotify, but also get distribution on Netflix, which is ultimately very good for Ford podcast offers and it also gives us revenue opportunities. This is the way to think about it as part of our ubiquity strategy and it's really important that while we build a good user experience. We also need to have a very strong creative offer this as.

So, we, uh, when we adjust prices in markets, we take into consideration a number of different factors. Uh, we look at things like, um, household income. We look at things like majority of the market. We look like, look at things like, um, specific value to price ratio. If there's a specific different, uh, you know, offering in that market.

Taken to account. And

and when the timing is right, we do it. Um, and we do it in a magnet that is right for that market.

So really strengthen a greater offering which is why we're seeing this growth while more and more creators want to be on Spotify with their video.

All right, we've got time for a few more questions.

We've got a follow-up 1 from Deepak mavan on.

That a related question from rich Greenfield on the TV opportunity. We recently saw you updated your Apple TV app to make it far more video focused how significant is TV based usage to Spotify today as a percentage of our overall usage and how does it play into your video advertising aspirations.

Gustav, AI models are getting much better in formats like video and audio as the platform. Do you see opportunity for Spotify to help artists with AI tools for their Music Creation process? And can you talk about Spotify strategy to enable AI tools for creators?

Thanks Richard.

So if you back out the reason we are building our TV experiences is that.

Thanks Deepak. So certainly we do and this is what I mentioned previously. Uh, when we talked about the industry initiatives, what we think is important, is that someone does this in a way where, um,

It's part of ubiquitous strategy well, we've seen it time and time again and Alex has talked about this as well as Ah.

As soon as you start using Spotify more situations, whether that's in the car on desktop on a TV you'll usage goes up your time spent.

Active dose per month goes up annual retention goes up so at the core of it. This is part of our retention and ubiquity strategy now.

Now in terms of the opportunity, we think that we see really exciting engagement metrics, we're very happy with the usage and we think we have plenty of room to grow in terms of users. So we're very excited about the usage and we think we have a lot of room to grow on the amount of users now. This obviously also helps advertising, but it's not the core reason we're doing it.

Or just in the music industry, industry can get the participate and to choose if they want to use this, these tools. So it's obviously a lot of of the excitement, but also a lot of fear around these tools. So, so we are trying to, to be the ones to do this responsibly and we're very excited about that. We, I don't want to talk more about the specific at this time, but that's what we're trying to do but it's also important to remember that. It's not only for music. Uh, we think our tools are also very helpful for uh podcasters and for authors. So we want to help all creators with these kinds of tools.

The core reason is because ubiquity drives engagement that drives retention for us.

Okay, our next question is from botcha levy on engagement? Can you talk about the impact on engagement and conversion to paid from the enhancements added to the free tier? How should we think about impact on margins and monetization opportunities down the road?

On a specific note.

Earlier complaint on the Apple TV App. So we hope you are happy Rich you can now use the new app.

Thanks, botcha. First of all the process is working. Um, we're taking share even in the most competitive markets.

Okay. We've got another question from Michael Morris on pricing you recently raised prices in bundled service markets, such as Australia, and the UK the increases in Australia were larger on a percentage basis than those in the U K y.

And um, since you kind of asked, here comes a mini sermon on subscriptions growth from me to you. Um, so the the key to subscriptions growth is really a strong funnel and to build a strong funnel. We need really 3 things. Um, 1 is, of course engagement. And we've talked about that earlier in the call.

Why were the UK changes smaller than do you expect future price increases to more closely look like those in Australia or those in the U K.

Thanks, Michael So we when we adjust prices in markets, we take into consideration a number of different factors, we look at things like.

Uh, and our engagement the listening hours on Spotify and also the active days that ghost has spoke to the growing and they're growing. Thanks to the numerous product launches that we have. This means that we keep people on the platform, which is again, very important for a strong funnel. Now, the second thing that's important is that when we are just prices, when we raise prices, uh, you need minimal churn, and that's also what we're seeing.

Household income we look at things at maturity of the market. We look like look at things like specific value to price ratio of if there's a specific different offering in that market.

And all of this all of this we take into account and and when the timing is right we do it.

And we do it in a manner that is right for that market.

Third of all and then to your point, a specific question is about intake for healthy subscriptions growth, you need uh um a good replenishment of now. And as you can, as you can hear, us talk about this quarter that really is the standout number, our meu is increasing uh, to higher levels than we expected. And

We've got time for a few more questions.

Then a follow up one from Deepak Mulvenon.

Boost of AI models are getting much better in formats like video and audio as the platform do you see opportunity for Spotify to help artists with AI tools for their music creation process and can you talk about Spotify strategy to enable AI tools for creators.

As our MAUs grow, we also see engagement grow. As the engagement of the MAUs grows, we typically see much higher levels of conversion. Every time that we've made a change to a free product and it has generated more MAUs in the history of Spotify, it's led to more business growth down the line. So we just have to trust the funnel.

Thanks, Deepak So certainly we do and this is what I mentioned previously.

All right.

When we talked about the industry initiatives, where we think is important is that someone does this in a way where.

It doesn't the music industry can get to participate and to choose if they want to use these tools. There's obviously a lot of excitement, but also a lot of fear around these tools. So.

Our last question today is going to come from Jason bazinet. You've taken some price increases in a few markets but the price gap between Spotify and Rivals varies by market. Can you talk about your philosophy regarding price increases and specifically what metrics? Give you more confidence to price? The service, well, above versus just above your competitors.

So we are trying to to be the ones, who do this responsibly and we're very excited about that I don't want to talk more about the specific at this time, but that's what we're trying to do but it's also important to remember that.

It's not only for music, we think AI tools are also very helpful for podcast theirs and four authors. So we want to help all creators with these kinds of tools.

Our next question is from Boccia, leaving non engagement can you talk about the impact on engagement and conversion to paid from the enhancements added to the free tier how should we think about impact on margins and monetization opportunities down the road.

Thanks, Boccia first of all the processes working with.

Thanks Jason. Well, the answer is sort of embedded, in, in, in a part of your question here. Um, we, uh, pay attention to, um, uh, to competition. But what we pay attention. The mo most attention to is, obviously our own offering and, uh, we care a lot about the value to price ratio. You've heard, good stuff. Talk about how we've shipped much faster in this last quarter. Uh, there's more than 30 product, 30 30 feature that's been shipped in the product, uh, and users are, are, are loving it. Alright? So the important thing for us is just keep continuing to, uh, to improve the value to price ratio. Meaning raising value on relentlessly, just build the best product out there. The best product will always win.

We're taking share even in the most competitive markets.

And as.

As you kind of asked here comes in many sermon on subscriptions growth for me to you.

So the key to subscriptions growth is really a strong funnel and to build a strong funnel we need really three things. One is of course engagement and we've talked about that earlier in the call.

and then when we look at our product and the value that it reflects, we will then take steps to understand if we need to adjust the price, uh, or not and the and the, and again, like I said, many times before it's based on specific market dynamics,

And some of the things that give us confidence is, as we've said, many times engagement they spend per month, where we know that we are well, well, ahead of our competitors.

And our engagement the listening hours and Spotify and also the active days that Gustav spoke to the growing and they're growing thanks to the numerous product launches that we have this means that we keep people on our platform, which is again very important for a strong funnel at a second thing Thats important is that when we adjust prices when we raise prices you need minimal churn and that's also what we are.

King.

Third of all and then to a point of Spears question is about intake for healthy subscriptions growth you need.

A good replenishment of value and as you can as you can hear us talk about this quarter that really is the standout number our MCU is increasing.

To higher levels than we expected and.

Is the music podcast and an audio books, service and some markets we haven't yet, gotten to, with our audiobooks offering. So as you look at our pricing, we are factoring in the value, not just in music, but in all of the verticals that we act as well, and I think this is an important addition to add. Because in in uh in in a lot of the markets, their perception of what Spotify is, is just very different than what it is in other markets as well.

Emma used grow we.

We also see engagement grow and as the engagement of their needs grow we typically see a much higher levels on conversion every time that we have made a change to the free product and it's generated more MCU and the history of Spotify, It's led to more business growth down the line, but we just have to trust the funnel.

Alright.

Our last question today is going to come from Jason Bazinet, you've taken some price increases in a few markets, but the price gap between Spotify and rivals varies by market and you talk about your philosophy regarding price increases specifically what metrics give you more confidence to price the service well above versus just above your competitors.

All right, great. Thanks everyone for the questions that concludes the Q&A session today. Um, want to hand the floor back over to Daniel for some closing remarks. All right, thanks Brian. Uh, well, I think the headline here is quite simple. The business is healthy, we're shipping faster than ever. And we have all the tools we need. We have pricing product Innovation, operational leverage, and eventually the ads turnaround to deliver both Revenue growth and profit expansion.

I said earlier, it all comes back to user fundamentals and that's where we are 700 million users, who keep coming back engagement at all-time highs. We're building Spotify for the long term.

Thanks, Jason well the answer is sort of embedded in a part of your question here.

We pay.

Pay attention to.

And as I transitioned the executive chairman I couldn't be more confident in. What's ahead Alex? And Gustav Have Been instrumental in getting us here and I'm excited to watch them, take Spotify to the next level. Thank you everyone for joining today.

As to competition, but we pay attention the moat most attention to is obviously.

Our own offering.

And we care a lot about the value to price ratio you've heard good stuff to talk about how we've shipped much faster and this last quarter. There's more than 30 products 30 features that's been shifting the product.

Okay, and that concludes today's call a replay will be available on our website and also on the Spotify app under Spotify earnings call replays. Thanks everyone for joining.

And this concludes today's conference call. Thank you for your participation. You may now disconnect

And users are are loving it right. So the important thing for US is just keep continuing to to improve the value to price ratio, meaning raising value and relentlessly just build the best product out there the best product will always win and then when we look at our product and the value that it reflects we will then take steps to understand if we need to adjust the price or.

please wait the conference will begin shortly.

Or not.

And again like I said, many times before it's based on specific market dynamics.

And some of the things give us confidence is as we've said many times engagement they spend per month, where we know that we are well well ahead of our competitors.

Maybe just an addition from my side too I think implied in the question is that perhaps.

There is a comparison of music to music.

Our competitors, but in many markets, where we act now.

<unk> not just a music service anymore. It is the music podcasts and audiobooks service in some markets, we haven't yet gotten to with our audiobooks offerings. So as you look at our pricing we are factoring in the value of not just in music, but in all of the verticals that we act as well and I think this is an important addition to add because in it.

In a lot of the markets their perception of what Spotify is just very different than what it is in other markets as well.

Alright, great. Thanks, everyone for the questions that concludes the Q&A session today I want to hand, the floor back over to Daniel for some closing remarks, alright, thanks, Brian well I think the headline here is quite simple the business is healthy we're shipping faster than ever and we have all the tools, we need we have pricing product innovation op.

Operational leverage and eventually the ads turnaround to deliver both revenue growth and profit expansion.

I said earlier it all comes back to user fundamentals and that's where we are 700 million users, who keep coming back engagement at all time highs. We're building Spotify for the long term and as I transition to executive Chairman I Couldnt be more confident in what's ahead, Alex and goods that have been instrumental in getting us.

Here and I'm excited to watch them take Spotify for the next level. Thank you everyone for joining today.

Okay and that concludes today's call a replay will be available on our website and also on the Spotify App under Spotify earnings call replays, thanks, everyone for joining.

And this concludes today's conference call. Thank you for your participation you may now disconnect.

Uh huh.

Yes.

Yeah.

Yes.

Hum.

Okay.

Yeah.

Okay.

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