Spotify Technology — Call Transcript 2026

Good morning. I'm Bryan Goldberg, head of investor relations at Spotify. It's my privilege to welcome everyone in the room and on the live stream to our 2026 Investor Day. Over the next several hours, the Spotify management team is going to be providing a detailed look into our business, where we've been, where we are today, and the growth opportunities we see ahead. Before we begin, we are going to be making some forward-looking statements that are subject to risks and uncertainties. Please review the safe harbor statement on the slide behind me. If reading's not your thing, then simply listen to the Snoop Dogg. Hey, hey. What's cracka lackin'? It's your boy, Big Snoop Dogg, and you already know the vibe. Welcome to Spotify Investor Day. Before we slide off into all of that good stuff, I got to lace you up real quick with a little something we call the safe harbor. Yeah, stay with me. Look, today you're going to hear some forward-looking statements. That means we talking about where the company might be headed, projections, expectations, estimates, and all that future talk. Let me keep it real with you. The future ain't set in stone. Things can change. Actually, results could come out looking real different, materially different from what's being discussed today. If you really want to understand all the risk and what could shift that picture, go ahead and tap into the company's filings with the SEC. That's where it's all laid out. On top of that, you're going to be hearing some non-IFRS measures. I know that sound fancy, all that means is we sometimes look at the numbers in a way that helps tell the fuller story. If you want to see how that all lines up with the standard numbers, check the appendix in the presentation. It's all broken down for you right there. One more thing before I let you all ride. Nothing you hear today means there's any obligation to come back and update these forward-looking statements later on if things change. Today is today. That's how we rock it. All right? Just like that, you're safely harbored. Let's get into it. Over to the team. Over and out from the D-O-double G. Please welcome to the stage Co-CEOs of Spotify, Alex Norström and Gustav Söderström. Good morning, everyone. I'm Alex. I'm Gustav. Whether you've been following our journey since the beginning or taking a fresh look today, thank you for joining us. Today is our opportunity to share with you why we are so excited about value creation for Spotify. Spotify is in the business of delivering creativity and culture to the world, helping artists, creators, and authors connect with audiences and grow their careers. Gustav and I, we've been with Spotify since the early days. I got the haircut to show for it. I'm not sure if you're aware, but Spotify turns 20 this year, and this marks our third Investor Day. We've seen the company through so many chapters, and we can say with confidence that the opportunity ahead has never been greater. Let us tell you about where we are today. We're in 184 markets with 761 million active users, nearly 300 million are subscribers. This massive group of paying passionate fans is not only double the size of any other music service, but also much more engaged than any other music service. That's why almost two-thirds of all premium music streams happen on Spotify. Far more than our subscriber base would suggest. The majority of these subscribers come back over 25 days a month, with over 100 million of them spending more than 28 days a month with us. That's 100 million people with almost 100% DAU over MAU. That also means that 3.5% of the world subscribes to Spotify, giving us more than 96% of the world left to win over. There have been more than 10 billion playlists created, and our global user base now generates 3.4 trillion taste signals every day across all of our verticals and surfaces, and that's up 43% since just the top of this year. Spotify is also one of the world's largest music communities, with nearly 500 million people subscribing to someone else's playlist and over 45 million people enjoying collaborative playlists each month, and almost 50 million people listening together in real-time using Jam. Spotify is also more than music today. Over 500 million people, half a billion people, stream the video podcast on Spotify, up nearly 50% year-over-year. In just a couple of years, we've already captured roughly 20% of the audiobooks market in the U.S. As of today, you all are going to hear much more from our members of our team about where we've been and where we're going. As most of you know, Spotify was born during the piracy era, when the music industry was in free fall. From day 1, we set out to solve problems that others thought were unsolvable. This mindset has defined everything since. Before we look ahead, Gustav, why don't you take us back a bit? Let's do it. Let's go back to 2018, our first Investor Day. The big question that many of you were asking yourselves then was, "Okay, Spotify was right about access versus downloads, but in a world of competitors with walled gardens and massive distribution advantages, how can you possibly win?" Our answer was counter-positioning, built on three ideas. First was Premium. We focused on maximizing reach while lowering the barrier to entry and building engagement. Second was ubiquity. Rather than sort of building a walled garden of our own, we chose to be everywhere, across devices and ecosystems. Third was personalization. We invested early in machine learning as the core driver of retention. That's pretty obvious, maybe, in the age of AI, but it was not obvious back in 2013 when we started. It wasn't. Of course, investors also wanted to understand how do you win in a category where everyone licenses the same catalog? Our solution was that we would use the freemium tier to build global scale, then we would win by out-innovating on the product itself. We didn't just rely on one or two differentiated features. We built a platform that continuously turns user behavior into new product experiences and ways to create value. Spotify became the R&D department of the music industry, where new offerings are tested at scale, adopted across the ecosystems. When we met again for our next Investor Day in 2022, four years later, we had delivered on that strategy and quite a bit more, actually. The new question was, okay, Spotify is now a great product, but will it ever truly be a great business with solid margins? Even more, can you ever actually go beyond music? Our answer to this question was the Spotify machine. The idea was pretty simple. It was to take all the capabilities that we had built for music and then extend them into new verticals, creating new business models, combining music, podcasts, and audiobooks into a single unified experience. All right. Let's take a look at what we have delivered since 2022. Let's start with users. We've added nearly 340 million people to the platform. The pace of this progress puts us well on the path to 1 billion users. We grew our subscriber base by over 110 million to reach 293 million subs. This makes Spotify one of the largest subscription businesses in the world. In revenue, we had a currency-neutral CAGR of 18%, reaching EUR 17 billion in 2025. That almost reaches the long-term target we set. We achieved a 32% gross margin in 2025, up from 25% in 2022, beating our 30% goal. We shifted operating margin over 18 percentage points from around negative 6% to a positive of almost 13% in 2025. Importantly, this has flowed through to cash. Free cash flow went from close to zero in 2022 to nearly EUR 3 billion in 2025. We've got a scaled, profitable business with a large and growing audience and multiple engines of growth. The Spotify you see today is very different from the one you saw four years ago. How did we achieve this while continuing to grow users, subscribers, and revenue at high rate? Well, first, we renewed our contracts with the rights holders in the music industry. We did this twice to make our music business model much more sustainable. Second, we grew our marketplace business at a much higher velocity, which contributed to improving our gross margin. Third, we reimagined our ads and podcasting businesses. While these were pretty hard pivots, they're putting us in a much better position long-term. We licensed one of the most compelling catalogs of audiobooks and added it to Spotify Premium in over 20 markets. Next, we launched global improvements to Spotify Free, making it even more competitive as a growth driver. Finally, we redesigned and reduced our org size to match our roadmaps, which resulted in operating leverage. There are countless other wins we're not covering here. The progress is evident. I love those audiobooks. All right, let's jump into what you're asking now in 2026. We think the first question you have on your minds is, okay, you're a real business now. Is this it? Is it mostly just incremental growth from here on? Our answer, absolutely not. You will hear much more throughout the day, but here are two key takeaways that I want to take with you. Spotify is not a single-product company, and our next chapter is not just about scaling the verticals that we already have. Sure, it's about continuing to improve our current monetization, but also about opening up new ways to monetize. Second, Spotify's opportunity to grow goes well beyond just pricing. There is actually no such thing as an average user, which you will hear more about today. Engagement and willingness to pay follow a power law, and we see clear opportunities to capture more value from our most engaged users. The second question that I'm guessing a lot of you are asking is, what does AI mean for Spotify? Is it a tailwind or is it actually a headwind? Guess what? It's a tailwind. Our view on AI is both pretty straightforward, but also somewhat contrarian to what some in the Valley may tell you. We do not believe that the advantage for us comes from owning our own general reasoning frontier model, what is called an LLM. Instead, we believe that general domain reasoning, like maybe coding, math, will stay widely available, especially given the massive investment and intense competition that you are seeing between the hyperscalers right now. Instead, our bet is that buying this capability on the open market will continue to be the most cost-efficient strategy. The advantage from us is that it comes from applying general intelligence to something that is proprietary, dynamic, and deeply personal. It essentially comes down to the unique data and context that only Spotify has about users. What is often called taste. Taste is continuously refreshed, it's grounded in real behavior, and very hard to replicate. Rather than training general large language models, we are training what we call our Large Taste Model. We have also referred to this as our large personalization model in the past. You know it's the same thing. This strategy lets us retain significant advantages and still benefit instantly from any frontier advances, and the very aggressive price-performance-cost curve that we're seeing there. We will cover this in much more detail today. At Spotify, we don't capture people's attention with empty calories. We do it by delivering an experience that people truly value, and they stay because the product earns its place in their day, every day. After nearly two decades, we understand that growth is driven by engagement and retention. Today, most platforms compete for time on app, whether it's minutes per day or hours per session. Spotify performs well on that dimension. From 2021 to 2025, streaming hours per subscriber increased globally by 10%. We've never believed that all time is created equal. This is where Spotify breaks from much of the consumer internet. We are not trying to spark a binge. We are trying to become a trusted companion across more moments in people's lives. We measure value not only by how long people listen, but how often they choose to return. Days in a month, not just minutes in a session. That distinction matters. Spotify fits into the morning commute, the study session, the workout, the dinner prep, the evening wind down, and the story before bed. Importantly, a growing number of those moments are spent with Spotify around the world, and people listen across every device. Their iPhone, Garmin watch, Tesla, Roku, and PS5, just to name a few. In fact, the number of times that you come back to us in a month and the number of devices you use might be among the most important metrics that we monitor. This is how we think about engagement on Spotify. Now, the other key unlock to our effectiveness is our verticals. Music came first and remains the core of Spotify. Layering podcasts on top adds more days of engagement. Most recently, we've introduced hundreds of millions of people to audiobooks, and the result has created our most active and well-retained group of all. Those who use all three verticals, music, podcast, and audiobooks, are engaging with Spotify almost every day of the month. It's pretty crazy. It's pretty remarkable. Now we have improved all three dimensions, use cases, devices and verticals. We've done so consistently over the last five years. This is exactly the type of engagement and retention that drives the growth of Spotify. We're not stopping there. We recently introduced fitness, which we believe has the potential to become a meaningful vertical in its own right. We have our eye on several more. Even our pricing is a retention story. We've raised prices multiple times now with minimal churn. Because users, they see the value and stick around. What you'll see today builds on that trajectory, continuing the Spotify growth story. What does this all mean for our goals through 2030? What does it mean? What does it mean? Well, here's what we expect to deliver. A mid-teens revenue CAGR, a gross margin of 35%-40%, an operating margin above 20%, and strong growth in free cash flow. We also remain committed to our North Stars, 1 billion subscribers, $100 billion in revenue, and over 40% in gross margin. Let me give you more insight into our approach to capital allocation. We will keep a strong balance sheet. This provides us with the flexibility to execute and reinvest in our strategy. We will also continue to explore inorganic investments, like we always have, that will strengthen our existing businesses and accelerate our strategy. We will keep countering dilution from stock-based compensation through share repurchases. We will also continue to see strong cash flow generation. Even with these efforts, we plan to start returning excess capital to our shareholders. Christian will elaborate more on these plans. We think this is an exciting outlook. Very exciting. Now I want to take you into how we plan to achieve these goals. We're betting on four big ideas. The first is that the world operates as a power law. For Spotify, that opens up significant monetization. Let me unpack what that means. In the industry, we often talk about averages, like Gustav said. There is no such thing as an average user. It's just a way to represent very different underlying usage and willingness to pay. This is our demand curve. So far, Spotify has focused on capturing two sections of that curve. With our scale-free tier, we capture and monetize the very long tail of people using Spotify, supported by ads. And this is what gives us a massive universal TAM. Next, our pay tiers. You meet the demand with a range of options. For example, the EUR 6.99 Student plan and the EUR 12.99 individual Premium plan. That means today we have almost 300 million people on what is one of the world's largest subscription platforms. We have expanded this Premium segment both up and down by making more plans more affordable with Family, Student, Duo, and others. Also by raising price, as we've added more features and offerings into Premium, again, with minimal churn. There are lots of people in Premium who are prepared to spend even more based on their incredible usage. Now, for some time, we have been talking about add-ons that would let us capture the full head of that curve. Now, we all thought that music was going to be first out the gate. I certainly did. It turns out that it was our newest vertical, Audiobooks, that got there first. Let me tell you about Audiobooks+. As Audiobooks and Premium rolled out across our first 22 markets, we saw listening grow significantly. What stood out was a group of highly engaged users consistently hitting their monthly usage limits. That was a clear signal of unmet demand. We introduced Audiobooks+, allowing those users to extend their listening by purchasing an add-on for additional hours. The response has been strong. In less than a year, more than 1 million users are already paying for Audiobooks+ on top of their Spotify subscription. Even more importantly, these are very valuable users. These users, these subscribers, have lifetime values that are multiples of Premium-only users. They spend far more, and they stay much longer. We see this power law of usage across all of our verticals, creating significant potential. In many industries, this type of demand curve typically gets divided between different players. Exactly. We are one of the few companies in the world that has the business models and the skills needed to cover the entire demand curve. From the outside, Spotify has always looked like a simple 2-step funnel, Free and Premium, large in size with a massive TAM, but ultimately a capped ARPU. What we're outlining today is actually a platform for a diverse set of higher ARPU products, each with a smaller individual TAM, but much higher ARPUs. Thanks to our scale, this represents many millions of users and a tremendous upside. This is just the beginning of our next monetization chapter. Today, Charlie will show that music fans will be able to interact with their music in entirely new ways. Something that we know that you've all been waiting for. Maybe. Yeah. As Roman and Maya will explain, we will also allow users to create truly personal podcasts for the first time, in addition to unlocking creator membership add-ons. Finally, Owen will talk to us about what is next for Audiobooks, which I won't spoil, but it turns out that even Audiobooks+ didn't satisfy the full demand curve of our user base. Book lovers are asking for Audiobooks++ and +++ and so on. You totally spoiled it now, by the way. I did. Across all of these use cases, the opportunity is consistent. We will give our most engaged users the ability to pay for more so that they can use more, control more, and access more. This brings us to the second big idea that we're doubling down on. Spotify is moving from single player and passive to multiplayer and interactive. When our users adopt new behaviors, even before the product fully supports them, we pay attention. That signal is actually one of our most valuable advantages. We see what people do, what they choose, what they share, and even what they say in natural language these days to us. That's right. Years ago, we saw something interesting in how our playlists were used. One person would start a playlist, then their friends would text back and forth to add songs, and then the original creator could share it with the group. At the time, Spotify wasn't designed for collaboration, but the signal was very clear. People didn't just want to listen, they wanted to listen together. We added on-platform messaging and created the shareable playlist. Now it's obviously everywhere, with more than half a billion people subscribing to someone else's playlist. Then we went all in on these network effects, introducing Jam, a way for users to listen with their friends and maybe family in real time. With nearly 50 million people jamming together, we are seeing even more engaged users. Now, the collaborative playlist is also another popular Spotify invention, which turned playlisting into something that groups build, share, and actually revisit. With almost another 50 million people streaming from a collaborative playlist, we've made music something that you just do together. All of this results in a pretty simple fact. You simply need to be on Spotify, end of story. Our experience is not about amassing followers or meeting strangers. It's about your real life connections and hanging out with your people. The next big idea, surprise surprise, centers on AI. The world is moving towards generation, where our users are in control. Our goal is to give them exactly that. Spotify launched in the era of curation, where the world's music was organized by our passionate users into tens of billions of playlists. Building one of the richest collections of human taste signals that was ever assembled, actually. Next came a recommendation, powered by algorithms and machine learning. We turned those billions of curation signals into features like Discover Weekly, maybe Release Radar, and personalized surfaces that made discovery effortless for hundreds of millions of people. Now, we're entering the era of generation, where the experience isn't just selected for you from a catalog, it's actually shaped by each of our users in real-time around their taste, context, and intent. For example, with generative AI, for the first time in history, it's now possible to create and consume truly personal media, individual media. A podcast that was made for you, an audience of you, or maybe at most, you and a friend. When you ask Spotify to, I don't know, give me the news, we will deliver a daily brief built around your interests, your inbox, your calendar, even the presentation that you're going to have later today. This media obviously needs a trusted private space, not a public feed. We've built exactly that. We're already seeing people take advantage of this with tools like Save to Spotify, which we launched a couple of weeks ago, where you can use your agent of choice, like maybe Claude Code, OpenClaude, Codex, to create individualized content. Like a narrated travel plan for your trip to Barcelona, or maybe dive deeper into a subject like token economy, based on what you've shared with your agent, like notes, files, articles, and more. Today, there is no media player for both public and private content, or put differently, there is no media player for the generative age. We believe Spotify will become that. Another way to think about this generative era is that computers finally understand English. This puts infinite creativity and control back in the user's hands. So for example, Prompt a Playlist, where you can ask it to create a Playlist using your entire listening history, going up to 20 years back almost, or to create one around who won Best New Artist. A fan favorite, "Make me a playlist with main character energy and send it to me every Monday morning to get me pumped up and confident for the week." This is a real user example, not made up. It's yours. It's yours. If you want to shape Spotify more broadly, Taste Profile lets you tell Spotify who you are and even who you want to be. No one else offers this level of control. Spotify truly becomes your media service. That brings us to our fourth big idea, time well spent. The most precious commodity that we each possess is our time. Yet, across much of the internet, too many platforms treat time as something to be captured and not really respected. Feeds keep you endlessly scrolling, often leaving you feeling regretful and empty. We believe there's another path. We enable experiences that generate love and bring joy and inspiration and insights, so that the time that you spend with us doesn't deplete you, it energizes you. We actively measure not just time spent, but how much of the time users consider valuable versus regrettable. Spotify consistently ranks among the most valuable time that people spend online. In our surveys, users report feeling good almost 90% of the time that they spend on Spotify. That stands in sharp contrast to broader industry patterns, where users, especially younger ones, report actually regretting up to 40% of the time that they spend on other platforms. Even more, in some cases. Even more. In some cases, they regret up to close to 70% of their time. It's pretty crazy to me. This is what makes Spotify different. We are not maximizing engagement at any cost. We're building for something more satisfying, and more importantly, durable. This is not just good for users, it's good for business too. It turns out that all time is not created equal, and people are willing to spend and pay for time that they value. With that, let me invite another Gustav. I'm living in a world of Gustavs. This one is Gustav Gyllenhammar, to show you how this all translates into subscriber growth around the world. Thank you both. Hi everyone. Historically, we have framed our opportunity to the smartphone. Music is not tied to one device. It is universal. Hardware is expanding beyond the phone, and software is redefining what listening can be across every surface. Now, when we think about TAM, our ambition is total population, because everyone has a relationship with music. What I want to show you is how our freemium system plays out, free fueling paid, country by country, culture by culture, all around the world. We are very proud that over 3% of the world's population pays for Spotify on a monthly basis. The global average hides an even more important story. When you look market by market, you can see that we're already capturing a significantly higher portion of the potential audience. In Sweden, our most established market, paid penetration is approaching 50% of the population. That's more than 10 times the global average. We don't think this is just Swedish pride, because other established markets are not far behind. In established markets like the U.K., Netherlands, Germany, and Australia, penetration typically ranges from 25%-50%, while faster-growing markets, they are earlier on this journey. Brazil is at 12%, the Philippines is at 4%, just above the global average. Our growth does not come from a single lever. It comes from a repeatable global playbook that we adapt locally to maximize growth. Simply put, first we attract listeners, then we build engagement. From here, we convert to subscriptions, then we deepen retention further, and over time, we grow revenue per user. Every market, every stage, it works. This is exactly where our conviction for 1 billion subscribers come from. It is not a top-down time exercise, but built from what we've already seen playing out in the markets where this model has been running the longest. AI is accelerating every stage of the playbook with faster localization and a hyper-personalized premium funnel every single time a user opens the app. Our conviction is also grounded in something structural that we are very proud of. Spotify's business is both global and local in a way that is extremely hard to replicate. Global scale gives Spotify brand power, data advantages, network effects, while local expertise makes Spotify feel native to each market with the right artists, cultural moments, tiers, pricing, and partnerships. It all starts with winning listeners. Before someone becomes a power-user, subscribes, buys an add-on, they choose Spotify. They first come to Spotify because they're looking for music. They choose to stay on Spotify because it quickly feels like the most personal, social, and culturally connected place to listen. They also choose Spotify because it is free. It can be easy to forget how magical this experience is. Remember when you first downloaded the app, you had instant access to all the world's music. Free is where it all begins. 71% of subscribers spend time on free before converting to Premium. Thanks to our investments in the free experience, we are creating an even bigger base of free users globally, migrating them to our paid product over time. Our updated free experience that rolled out globally last year, it has improved engagement and retention across the board, resulting in double-digit engagement lifts with outsized positive impact for Gen Z. Since our last Investor Day, we have increased our number of free users by roughly 90%. This free growth is accelerating, and we believe we are on the right path to reach 1 billion users before 2030. Music is universal, but taste is local. What works in Stockholm doesn't automatically work in Nashville, Rio, Mumbai. Only 47% of music streamed on Spotify is in English. Local music tops the charts and dominates listening in most countries around the world. In 90% of the cases, the top artist is performing in a local language. To truly win, our product has to speak the language of the market, both literally and culturally. That's why Spotify DJ, one of our highest engagement features, has just expanded from English and Spanish into French, German, Italian, and Brazilian Portuguese. We will continue to expand this feature to more languages in the future. This expansion will happen much faster. What once took years of market-by-market investment now takes a fraction of the time. We are combining nearly 20 years of taste data with the speed of AI. This is where our global platform also becomes a local advantage. We combine superior discovery, personalization, and brand relevance with deep local understanding, strong partnerships with artists and other creators. Take our recent BTS album campaign. It was uniquely Spotify. You saw millions of fans engaging in-app while thousands of fans enjoyed our concerts and fan events we had in New York, Seoul, São Paulo, Mexico City, Tokyo, Jakarta, and Manila. It was truly one global moment made local and interactive everywhere. When we get this right, product love, brand love, they reinforce each other. Word of mouth and artist advocacy, they are two of our most important acquisition levers. They're leading to astounding growth in every market. Free is where the relationship begins. At our festival, premium is the headliner. It is the best place to be a fan. It's a clear destination for the most engaged users who want more from music, podcasts, audiobooks, video, and fitness. The freemium model is all about driving this conversion. 10 years ago, only 32% of our U.S. and Canadian users paid for premium. Today, 60% are on premium. This is off of a base that is four times the size it was a decade ago. In Brazil, we've doubled the conversion rate since 2016 from 22% to 44% today, while the user base has grown 14 times, resulting in a 27x growth in subscribers. In our earlier stage markets across Asia, Middle East, and Africa, we're seeing massive free user growth. These two forces, significant and strong conversion in established markets alongside massive free user growth in developing markets, means our global conversion rate has actually stayed around 40% for many years. This is exactly how the model is supposed to work. This doesn't just happen. Over the last 20 years, we have fine-tuned one of the world's highest-performing freemium engines. We know how to best design our free and premium tiering system, when to bring premium marketing and offers to the right user at the right time, and now AI is turbocharging this. Over time, users can move through the portfolio as their needs and willingness to pay grow, student to individual to duo to family, and eventually into add-ons and higher value experiences. A user who enters on individual and moves on to family and then buys an Audiobooks+ subscription is our highest LTV cohort. To help you understand the full picture, I want to visit three markets. They show the arc of our model from established, to scaling, to enormous long-term opportunity. We will start with the U.S. The U.S. is the world's biggest music market, and we have been capturing more of it every single year. Our free tier is increasing engagement and retention amongst U.S. users, and this engagement is converting. MIDiA data shows that we have grown our U.S. premium market share by 8-10 percentage points over the last six years with gains every single year without exception. Where we have established a large subscriber base, like in the U.S., is also where we have the most permission to introduce additional paid products. Our U.S. Premium users, they are deepening the relationship with Spotify. They're adding podcasts and audiobooks on top of music, meaning more listening days per month, stronger retention year-over-year, and this deep subscriber engagement leads to higher ARPU as we can serve our power users with products like Audiobooks+. With paid penetration still under 20% in the U.S., there's a lot of runway left here. Across our established markets show the same similar story. Now let's move to Brazil. Brazil is a passionate music market where culture moves fast. Spotify has built exceptional brand strength in Brazil. What matters most is what we're building beneath this growth. It's infrastructure that compounds. Local artist partnerships, culturally resonant editorial, campaigns that embed Spotify into the moments people care about. Like our Q1 summer hit celebration, over 300,000 fans voted in-app, crowning Anitta as the queen of the Brazilian summer, and local payment options. Pix reaches almost every adult in Brazil, we were one of the first merchants to integrate Pix Automático, the recurring version in 2025, at a 90% lower cost than taking credit cards. Since 2022, we have doubled net additions in Brazil. 2025 was our strongest year ever for subs intake, and this momentum is accelerating. In 2026, revenue is going to grow with more than 30% year-over-year. Let's close out with India. 150 million smartphones are shipped in India each year. According to World Data Lab, India is contributing the largest share of new consumer growth in the world this year, surpassing China for the very first time. India's potential is enormous. When we launched in India in 2019, we were the 10th player in one of the most competitive streaming markets in the world. Today, we are the leader in audio streaming. India now sits alongside the U.S. as one of our largest markets by MAU, and it has some of the highest brand love of all of our markets. The subscription economy opportunity is enormous. Even with unique dynamics such as low data costs, high ad tolerance, today, less than 10% of our Indian users are on Premium. This isn't a challenge. It is our runway. User growth, especially when coupled with brand strength, market leadership, has been a consistent predictor of subscription growth across all our markets. We are adapting with local entertainment partnerships, deeper payments integration like UPI autopay, which accounts for over 90% of our intake at an 85% cheaper effective rate than credit cards. We've also introduced a new pricing tier, Premium Platinum, priced at just over 2x the cost of our standard premium offering. The early signals are very strong. In just a few months after launch, with minimal marketing, more than 7% of our subscribers are already on this higher value tier. Even here, where we're still building the base, the demand curve is already showing us there is no such thing as an average user. It points to significant upside as we scale further. Overall, conversion is accelerating in India. In 2025, we added three times as many net subscribers as in 2022, and our subscriber count is seven times higher compared to when we presented at the last Investor Day. With 1.4 billion people, rising consumer spending, we can imagine a future with more than 150 million subscribers in India. If you zoom out, this playbook is working everywhere. This growth creates the foundation for the next part of the story, monetization. Over the last 20 years, we've proven people will pay for music globally. For much of our history, we have kept pricing low, which helped us first introduce streaming at scale. Three years ago, we hadn't moved the baseline price in 15 years. Now, pricing strategy is showing up in the P&L. We're continuing to scale while raising price, because we keep expanding value, churn remains low, while the revenue impact is highly accretive. Pricing will continue to be a tool in our toolbox. We think long and hard about when to increase. You can expect us to continue on this journey. As we've said before, we always want the user to win. They should always feel like they're getting more value. This is how we ensure that their time and money is well spent. It's the perfect recipe for lifetime value. With highly retained and engaged subscribers, this revenue opportunity goes beyond price. This is the power law in action. Markets with the highest level of engagement and where we can see the strongest subscription performance, the highest level of podcast and audiobook adoption, and the highest willingness to purchase additional item. Today, we have nearly 300 million Premium subscribers. This is the starting point, not the ceiling. Every market in this company's history has followed the same arc. We know this playbook works, and now AI is helping to accelerate every stage. The path to 1 billion subscribers is not just a long-term aspiration. We believe this is an extrapolation of what we've already proven, continent by continent, market by market, user by user. To talk about why people stay, why they spend, and why they love Spotify more than any other audio product on Earth, I'm going to pass things on to Nicole. Thank you, Gustav. Every December, Wrapped takes over. Social feeds fill up at levels usually reserved for championship games or the biggest award shows. A Spotify product experience quickly becomes something people use to express who they are and connect with others. That's because Spotify is where product and culture meet. Last year alone, Wrapped generated more than 620 million shares. Why is Spotify able to deliver a marketing campaign that becomes a cultural phenomenon year after year? It starts with a simple idea, no regrets. Every day, we make deliberate choices so that time with Spotify feels worth it. We take ordinary moments and make them more engaging, more personal, and more meaningful through the experiences we create. This belief and the choices we make as we build trust with the user shapes how we design. It keeps us focused on experiences people value and deliberately choose to come back to, making us more efficient in how we invest our time and effort. AI is accelerating that dramatically. It is helping us move from signal to insight faster than ever before, interpreting user intent, identifying what matters earlier, and giving our teams a clearer view of where Spotify can create even more value. That matters because great product design starts with human judgment. AI does not replace that judgment, it strengthens it. It helps us focus our teams on the opportunities most likely to deepen the relationship between Spotify and our users. That means we can deliver a better Spotify to more than 760 million users while staying disciplined about what deserves to be built and scaled. When users feel their time with Spotify is time well spent, that encourages exploration. When people feel Spotify is genuinely enriching their lives through music, they become much more open to discovering podcasts, fitness, audiobooks, and other experiences across more moments of their day. In April, we partnered with Morning Consult and Burson on a major brand affinity study across six major markets. What stood out was not just the ranking, but how people described their experience. Across major platforms, Spotify ranked number one for time well spent. Asked the inverse, which service they never regret using? Again, Spotify ranked number 1. Two questions, same answer. The signal's even stronger with Gen Z, one of our fastest-growing audiences. Gen Z was our strongest generational cohort on time well spent, with almost 90% reporting overall satisfaction with Spotify. For Gen Z, Spotify is not just something they use. It consistently feels worth it. That matters, especially at a time when parents, myself included, are increasingly mindful of the time their kids and teens spend with screens. Not only is this the right product philosophy, it is also good business. It builds trust, it strengthens habits, and it makes people more likely to recommend the experience to others. The single biggest source of new Spotify users is still a recommendation from an existing user. That only happens when the product consistently delivers. Brand love is not just a sentiment metric. It is acquisition leverage. It improves the efficiency of paid marketing, reinforces conversion from Spotify Free to Spotify Premium, and strengthens retention once people subscribe. In fact, just last week, we launched a special on-platform experience to celebrate Spotify's 20th birthday. In the first six days, almost 100 million people engaged in the experience, helping drive our single biggest day of subscriber intake ever. When you choose what to listen to, shape a playlist, or go deeper into a song's DNA, you are investing attention. On Spotify, you leave with something, a mood shifted, an idea sparked, or a connection deepened. We hear from users again and again how Spotify is their companion throughout the day, even enhancing the experience of chores, cooking, and focus time. Music, books, and podcasts are not disposable formats. They ask for attention and intention, and that effort creates meaning. Because in a world of infinite content, the winners will not be the platforms that take the most time. They will be the ones that make time feel most valuable. Now, Nat will show you how that philosophy comes to life in the product. Thank you. Thank you. At Spotify's scale, product development starts with noticing user behavior, whether it's a playlist people share, a prompt they repeat, a feature used in ways we just didn't expect. The opportunity is not to chase every signal, but to identify the ones that can improve retention, conversion, and long-term value. That is the model we're focused on. Observe demand, build the right experience, measure whether it deepens habit, then scale what strengthens the business. SongDNA and About the Song are good examples. Fans don't just want the track, they want the meaning, the collaborators, the samples, the influences, and the creative process behind it all. We turned that desire into a native Spotify experience. Since launching in March, more than 70 million subscribers have used SongDNA, generating more than 265 million interactions, with Gen Z leading the way as early power users. About the Song shows the same pattern, with three out of four users rating the feature positively. The important point is not just that users like these features. It is that deeper context creates higher intent sessions, turning listening into discovery, fandom, and repeat engagement. That gives users more reasons to stay inside Spotify, and it gives creators and rights holders better ways to connect with the audience already there. That is what separates meaningful discovery from empty engagement, and it also shows how time well-spent changes the way we build. When you are clear on the kind of time you are trying to create, you stop investing in features that simply fill the space, and focus instead on experiences people actively choose, return to, and share with others. That focus becomes even more powerful when the path from vision to execution gets shorter. AI is dramatically reducing the time and cost of turning ideas into real product experiences. Months become weeks become days, and work that once took entire planning cycles can now happen far faster. As Nicholas will discuss later, at Spotify, any employee can now create a new Spotify experience and instantly make it available in our internal app store for others to try. This kind of AI-powered prototyping expands who can contribute ideas. It helps teams align around something tangible, and it accelerates learning about what deserves deeper investment. This speed and focus benefits the product and the users in three ways: more control, deeper connection, and richer personalization. First, control. People want Spotify to respond to them, not the other way around. That is why we build features that let users tailor the experience around the moment that they're in. Video toggle is a simple example. Users can decide when video adds to the experience. That kind of control builds confidence. You can see it in the way people spend time curating their exact Olivia Dean or Justin Bieber playlists, and then later unwind with a Bobby Lee or Amy Poehler podcast. When people can customize the experience, they trust it, return to it, and make it part of their daily lives. Second, connection. As generative AI increases the volume of content, connection to the people behind the art becomes even more important. Spotify goes beyond helping people find something to listen to or to watch. We help them understand who made it, why it matters, and where to go next. Third, personalization. Taste Profile gives people more direct control over how Spotify understands them across music, podcasts, and audiobooks. Increasingly, users can engage with Spotify in natural language and have the experience adjust to them in real time. This is where AI becomes a true tailwind. Spotify is not just predicting what might come next. It is becoming more interactive, listening, interpreting, and responding while building a deeper understanding of who you are and how your taste is changing. That shifts the relationship. The more you invest, the more Spotify feels personal, useful, and relevant. As the platform grows, every new single helps us understand users better and increases the value they get. The richer that system becomes, the smarter and more effective Spotify gets across every vertical you will hear about today. To take you deeper into where it all began and where the opportunity is still expanding, here is Charlie Hellman, Head of Music. Thanks, Nat. Even at the scale we've achieved, hundreds of millions of subscribers, Spotify continues to strengthen its role as the primary driver of growth for music. In 2025 alone, we paid more than $11 billion to the music industry, increasing more than 10% year-over-year. That's more than double the growth rate of the music industry's other revenue sources combined. Our all-time payouts now exceed $70 billion. No retailer in history has put this much money back into music, that, in turn, has created the capacity for more successful artists than ever. The number of artists generating more than $100,000 a year from Spotify alone has more than tripled since 2017. That earning potential is powered by our subscriber base expansion, our personalized recommendations that connect any type of artists to the right fans, and our marketplace promotional tools that allow artists to bet on themselves and propel their own success. Our promotional tools for artists have become the most relied-upon marketing engine across the industry for both new releases and older catalog, from the biggest labels in the world to the do-it-yourself artists. That value we're providing to the industry is reflected in the increased demand we see for these tools. The gross profit contribution of marketplace tools has grown 4X in the last four years. This is what we do. We identify hard problems in music for artists, for fans, and build solutions that move the industry forward. We did it with piracy, creating a legal experience better than the illegal one. We did it with streaming, turning the access model into real income. We did it with discovery, helping more artists find and connect with audiences, even as the volume of music has grown exponentially. It's only continued. Technology's been expanding music creation for decades, from bedroom production tools to do-it-yourself global distribution. More artists have been able to reach audiences and create than ever before. Spotify's always benefited from that growth, and our job is to make sure that that growth translates into real opportunity for artists. Today, we're entering a new moment. Generative AI is accelerating creation at an unprecedented pace. In many ways, this feels like a continuation of the same trend. More music, more choice, more ways for fans to discover what they love. At the same time, things are starting to feel like the Wild West. Alongside new original work, there's a surge of covers, remixes, reinterpretations built on existing music. Without a rights system in place, artists can lose control of their work, and value can be created without it flowing back to the people who made it. That matters most for established artists, the ones who spent years building iconic bodies of work. This is exactly the kind of problem Spotify was built to solve. Done right, fans' desire to reinterpret music is an opportunity for revenue, for driving attention back to the original work. Catalog growth has always been good for Spotify. We want to make sure that this next wave is good for artists, too. That means building a legal, responsible experience that's better than today's rogue alternatives, where fans can create, and artists can choose to participate and benefit. Today, we're announcing landmark licensing agreements with Universal Music Group and Universal Music Publishing Group. For the first time, fans will be able to legally create covers and remixes from participating artists' and songwriters' catalogs with both the original artist and the songwriter sharing in the value created. This will launch as a paid add-on, and our Premium users will be able to try it out first. All users on Spotify will be able to enjoy these songs. Fans create, they share, they bring new audiences back to the music they love. Artists and songwriters participate in the value that their work inspires as a brand-new source of income on top of what they already earn on Spotify. For Spotify, it unlocks fan spending amongst our super users that doesn't exist today. The goal is simple: ensure that when fans create, artists benefit. This era of generation doesn't need to threaten the future of music. Because we built the system legal, trusted, and aligned, we can make sure that the value flows back to the people who created it. We're building with artists and songwriters. That means consent, credit, and compensation by design. That's how Spotify operates, and it's how we'll lead the industry into what comes next. Now, over to Joe. There we go. All right. Thank you, Charlie. Spotify has helped shape culture for years. It's probably not lost on anyone here that the most streamed artist in the world for the last six years sings in Spanish. We're proud to have played a role in helping Bad Bunny's music reach every corner of the world. Here's what most people don't realize. That doesn't happen automatically in some algorithm. We have people who live and breathe music culture all around the world. They know what's bubbling up before it hits a chart. When they spot something real, we can help it travel in ways no other platform can. That combination is hard to copy. Most platforms operate globally from a distance. We don't. We have the local instinct and the global reach, and they're working together in ways that no one else can replicate. In a world that is increasingly reliant on AI, the human expertise behind it becomes more scarce and more valuable. As Gustav said earlier, AI is only as good as the information it has access to, and we have two decades of it, two decades of editorial taste and cultural instincts from the world's best music editors. You combine that with a deep understanding of how hundreds of millions of people actually listen, and you have a foundation no one else can touch. I mean, anyone can tell you that Bad Bunny has over 100 billion streams, but it takes taste and real human judgment to spot an underground breakout in Puerto Rico or an emerging scene in Copenhagen before anybody's noticed. That's a proprietary foundation that took us 20 years to build. You can't shortcut your way to it. We're investing in bringing that same expertise to the surface so fans can experience the human side of Spotify. That instinct is what's bringing our playlist editors in front of the camera. Next month, New Music Friday, one of the most recognized brands in music discovery, becomes a video series. Every week, our editors will bring their taste and authenticity directly to fans, breaking down why the world is talking about the songs that just dropped. That's what makes us different from anything an algorithm can produce. It's not just our editors. Artists are embracing video on Spotify, too. Here's something that might surprise you. Spotify is now one of the largest music video services in the world. Official music videos, live performances, covers, all of it lives on Spotify. It's seamless. You can flip from a track to a video with a single tap on your phone, tablet, TV, desktop. Today, more than two-thirds of all premium subscribers have watched music videos on Spotify. 65% say it makes their premium subscription more valuable. For our most engaged listeners, watching a video leads to an 85% increase in streams of that song in the following month. You might wonder, how much more value can we add to a premium subscription after 20 years? The answer is a lot. As Nat mentioned, SongDNA and About the Song have already transformed how fans connect with the music they love. You add video in the mix, and we've added more to the core music experience in the last 12 months than in many of the previous years combined. We're moving faster than ever. That video experience spans a full spectrum, from official music videos and live performances to original programming like Countdown To, Spotify Live Room, and Billions Club Live. Let's talk about Billions Club Live for a second. Billions Club Live celebrates artists whose streams have crossed 1 billion. For each performance, we bring the artist's top fans into the room with hundreds of millions of fans on our platform and the data to know who listens the most. It's something only we can do. Each show is captured on film and released globally. You've got The Weeknd in Santa Monica, Miley Cyrus in Paris, Ed Sheeran in Dublin, Bad Bunny in Tokyo, and our most recent, Olivia Rodrigo in Barcelona. Just wait until you see the final edit of that show. Let's just say our sound engineers earned their keep. In every clip I saw, you could barely hear Olivia's voice. The crowd was singing every word back at the top of their lungs. Now imagine if we could ensure that fans like those kids in Barcelona, the ones who truly deserve to be in that room, actually get there, not just for a handful of superstars, for artists and tours at scale. Rene is going to tell you more about how we're making that happen. Thanks, Joe. We have all experienced it. Your favorite artist announces a tour. You are desperate for tickets. You clear your calendar. You set an alarm for the moment you can buy. The clock strikes. You are in, you are ready to go, somehow you're already behind thousands of people, likely also including bots and scalpers planning to buy tickets that they will personally never use. You refresh, you wait, you finally get through, the tickets you want are already gone. They are there, they are already being resold at three times the price by a scalper. It is one of the most frustrating experiences in music today. It's frustrating for fans. It's frustrating for artists, too, who look out at a crowd and wonder, "Are the fans who built my career actually here?" The tragic irony here is that the most dedicated fans are too often the ones that don't make it into the room. That is deeply unfair. It has been unfair for far too long. Today, that changes. Spotify is proud to introduce Reserved. For the first time, an artist's most dedicated fans on Spotify Premium will have two tickets held just for them before they go on sale to the general public. No racing bots, no chasing around online for pre-sale codes, just two tickets held for you. Why? Because you've earned them. Here is how Reserved works. We don't just look at streams. We look at everything. Streams, yes, but also saves, how deep you go into an artist catalog, how you engage with an artist across the entire Spotify experience. The full picture of what it means to be a true fan. If you're selected, Spotify holds two tickets for you. Actually puts them aside. You'll then have a dedicated window of time to buy before the general public rush. One tap and we guide you directly to our ticketing partner to complete your purchase. Only Spotify can pull this off. Here's why. First, verified humans. Our premium subscribers are real paying fans. Not bots, not brokers. Second, we know who the diehards are. Nearly two decades of listening data across hundreds of millions of users means that we can identify true fandom at a depth that no one else can come close to. Third, we have the scale to make this really meaningful for artists. Spotify has millions of verified super fans ready, more than enough to fill every reserve seat on any given tour many times over. We've already proven it. We've been quietly building towards this moment for years. Having worked with more than 40 ticketing partners and driving more than EUR 1.5 billion in ticket sales to date. Reserved is the evolution of that work. This summer, Reserved arrives with Live Nation as our launch partner in a multi-year agreement. Spotify is the exclusive audio streaming service offering this type of Reserved access to Live Nation tickets. We will help fans get access to many of the most anticipated tours in the U.S., with more markets coming fast. Reserved is one of the most substantial improvements to Spotify Premium since the founding of the company. This is just the beginning. We see clear opportunities over time to expand the experience in ways that creates even more value for fans, for artists, and for Spotify alike. Every streaming service has the same music, but Reserved is something that only Spotify can offer, and that changes what it means to be a subscriber. Up next, Roman and Maya dive into podcasts. Thank you, Rene. Four years ago at Investor Day, there were some significant questions around the business model behind podcasts. Our podcast business was a highly negative business and a drag on overall company margin. Today, podcasts are on their second year of profitability, and growth is accelerating. From here, we see a path to 40% margins in the long term. Strengthening economics goes hand in hand with user value. In fact, podcast engagement has doubled since we last met. In our mature podcast markets, over 40% of Premium users listen and watch every month. This is the advantage of moving first. We made a bet on podcasts and the amazing creators behind them, and we did it years before most saw the opportunity. Today, Spotify is the R&D engine of podcasts. We made the investments, we built the tools, and the outcome is clear. We've contributed more than EUR 10 billion to the podcast industry in the last five years. The reason we can drive that much value back to the industry is simple. We are the only platform that operates at three layers. Number one, we are a leading consumer platform for podcasts. By bringing podcasts into the core Spotify experience, we drive meaningful incremental value. We deepen habits, and that directly drives retention. Premium users who stream audio podcasts in addition to music are spending three more days on Spotify each month. Users who stream video podcasts spend one more day on top of that. Number two, as a premium publisher, we're scaling our advertising business by leveraging deep engagement. Sponsorships, our fastest-growing format, are up over 100% year-over-year. We're unlocking a huge commercial opportunity with the ability to insert those sponsorships dynamically. Our new creator sponsorships product allows shows to monetize up to 50% more inventory by providing better tools to schedule, replace, and analyze their supply. Ultimately, this drives higher revenue while reducing the overall ad load, creating a better listening experience for users, and helping each advertising partner stand out more clearly. Number 3, we're building the most effective tools for creators. The Spotify Audience Network and the Spotify Partner Program create a unified foundation for monetization across platforms. Our Distribution API enables more than 1.5 million shows to bring video to Spotify while keeping their existing hosting providers. Later this summer, we're taking the next step by introducing memberships, a set of tools that allow eligible creators to offer subscriptions directly to their most dedicated fans on Spotify. Alex and Gustav have talked about add-ons. This will bring the model to podcasts. Passionate fans unlock deeper experiences, and fandom becomes recurring revenue. What makes our approach different is that we're not sitting between creators and their audience. Creators own the relationship. They have direct access to their subscribers with the ability to import and export across platforms. For those who choose to manage subscriptions elsewhere, Spotify Open Access remains our open offering, allowing creators to distribute gated content on Spotify while using any of our partners. Everything we do is powered by world-class talent. "The Ringer" continues to define the category with authority and taste. Bill Simmons remains one of the most iconic voices in sports and culture, whether it be his shows or sold-out live events. Amy Poehler's "Good Hang" won the first-ever Golden Globe for Best Podcast. In fact, for those of you in the room, you can check it out right there. The Joe Rogan Experience" tops Spotify Wrapped year after year. Wherever a creator builds, we give them the tools to grow. If creators win, we win. Next up, Maya will show you how the product drives the next phase. Thank you, Roman. For us, the future of podcasts on Spotify is all about making them easier to find, easier to use, and more valuable to the user and creator. Let me show you how we're building that. Let's start with video. As you heard earlier, more than 500 million users have streamed a video podcast on Spotify, up nearly 50% year-over-year. This growth reflects how video expands the format. It gives creators a richer way to connect with their audiences and gives users a more immersive way to experience the shows they already love. Across both video and audio, we've been focused on making the podcast experience on Spotify more intuitive and more interactive. Transcripts make the catalog searchable. Automatic chapters take you straight to the moments that matter. Now you can also ask questions about anything you hear and get answers in real time without leaving the experience. It's an amazing way to engage with podcasts, letting you go further on any topic the moment something sparks your curiosity. Imagine you're listening to your favorite podcast about music history. They mention something that catches your attention, but then they just move on. Now, you can just ask, "Wait, what music video did Spike Jonze direct?" Because Spotify understands what you're listening to, it doesn't just answer the question. It picks up the exact moment in the episode and gives you the answer in context. Then it goes a step further, linking you to other songs with videos he's directed so you can keep exploring without breaking your flow. That leads to the next piece, discovery. My favorite example is Prompted Playlist, which we recently expanded to podcasts. You write a simple prompt like, "Find me interviews with authors whose books recently got made into movies," and you get a completely personalized list of episodes. What we're seeing is that more than 50% of listeners who use Prompted Playlist discover a new show. That's another signal of how powerful personalization can be. The next step is building a podcast experience made just for you, one that hasn't existed before and couldn't exist at scale until now. We're already seeing the demand for this. Some users have started creating custom audio using their own agents, and when we introduced the ability to save those episodes to Spotify, the response exceeded our expectations. Today, this is still a very manual and technical process. We're making it easy for users to create personal podcasts right inside Spotify. Just like with Prompted Playlist, all you'll need to do is write a prompt, and we'll generate short, personalized, private audio based on your input. It draws on world knowledge, your Spotify Taste Profile, and any additional context you import to create something that's relevant, dynamic, and shaped just for you. Here's my daily briefing as an example. I live in the Hudson Valley. I'm interested in what's going on in my area and the top tech headlines. This morning, it opened with a quick update on the new AI release that everyone's talking about. It flagged an artist I've been listening to that's playing right near me this weekend. It even pulled in a podcast episode from a show I hadn't discovered yet but was exactly in my wheelhouse. Another way I love to use this feature is to prepare me for the workday ahead. The other day, I had a meeting with a few of our podcast partners to get their feedback on a new feature. I uploaded a doc with details about the update and some notes from the last time we met, and Spotify made me a personal podcast summarizing their feedback from last time, predicting some questions they'd have this time, and it even gave me some headlines about their recent episodes, so I'd have some talking points. This saved me a ton of time and let me head into the meeting with everything I needed with a really short, convenient summary to listen to on my commute. Just like the monthly allowance of hours we provide for audiobooks listening, all Premium users will have a monthly allocation of credits to generate podcasts included with their subscription. Power users who want to be able to do more with personal podcasts will be able to purchase additional credits for more inference. Speaking of power users, let's talk about fitness. This is a behavior that already lives across music and podcasts and video. Spotify has the audience, the personalization engine, and the daily contextual relationship to make that behavior more valuable over time. We've been the soundtrack to people's workouts for almost 20 years. Now, through our Peloton partnership, Premium users have access to more than 1,400 workout videos. In just the first four weeks, we're already seeing strong engagement. It turns out people don't just want to follow workouts, they want to shape them. We're making that possible very soon with guided adaptive running sessions. You can prompt something like, "Give me a playlist for a 30-minute run at an eight-minute pace," and Spotify will select tracks in your taste, stretch them to the exact right tempo, seamlessly mix transitions between the tracks, and layer in coaching cues to guide you through your run. We see significant potential to build more experiences tailored to fitness enthusiasts, and that's how we think about the all-day user. Someone who turns to Spotify across more moments, more use cases, and more parts of their daily life. Let's turn the page to the one audience at Spotify that's more engaged than podcast listeners. Here's Owen. Thank you. Thank you, Maya. As Maya mentioned, when someone adds a book habit to their existing podcast and music listening, they become part of the most engaged audience on the whole of Spotify. This additional engagement, it is important because books are some of the most meaningful time well spent. Books, they inform us, they educate us, and of course, they entertain us as well. This makes them fit naturally on Spotify. Just two years ago, we entered a EUR 10 billion global audiobook market that was underserved by the existing players. Since then, we have expanded to 22 markets, bringing audiobooks to tens of millions of new listeners. What matters most is how we have approached this category. A credit-based model does not allow every book to find an audience, so we introduced an hourly consumption model that unlocks discovery across a much broader range of titles, especially shorter formats such as poetry or children's books. As a result, our already sizable audience of younger readers and families continues to grow as more people explore the kids and family catalog that we keep investing in. As a new father, this is really top of mind for me. At the same time, we've scaled the catalog from 150,000 titles at launch to more than 700,000 titles today. It's a huge catalog to explore. We've opened up the ecosystem with many English language publishers moving away from exclusive deals to reach broader audiences through Spotify for the very first time. We've introduced industry-first experiences like Page Match and audiobook recaps, redefining how people discover, navigate, and return to books. Just like in music, when we lead, the rest of the industry follows. In a short period of time, we've established ourselves as a major force, driving where this category is headed. What's become increasingly clear is that the industry has been waiting for a platform like Spotify, a platform that can connect formats, a platform that reduces friction, and that can bring entirely new audiences into books. We're just getting started. We see significant opportunity ahead, and we're going to keep growing the books experience for listeners, for authors, and for publishers all around the world. All of this is positioning Spotify to become the home for all books. In April, we launched print book purchases through our bookshop.org partnership because we know that many of our users, they want to go back and forth between a physical book and an audiobook. Every sale directly supports independent bookstores. We've also invested in reimagining the reading experience itself. Our feature Page Match is now available in over 30 languages, and it's been a breakout hit since launching in February. As the first experience of its kind, it lets users move seamlessly between a print or e-book and the audiobook on Spotify, and it's something I absolutely love. I'll often read the book in the evening, and then I go for a run in the morning. I just switch to the point in the audiobook, and I can take the book with me. Users are telling us the same thing. We're seeing strong repeat engagement with users returning week after week, even as the feature scales. It's quickly become one of our most consistently used and highest-performing product launches. We've seen an uplift in listening of up to 55% over a month when readers use Page Match, and it's particularly popular with younger listeners, with the average age of a Page Match user being six years younger than the average audiobook listener. What's even better, users are finishing books twice as fast. That means users are reading more books, generating more revenue for authors, and purchasing more listening time. This is exactly the kind of multi-format behavior that we believe will define the future of books on Spotify. Even best-selling authors agree with us, so thanks Harlan for helping me make that point. We're also bringing entirely new audiences into the category. Almost half of Spotify audiobook listeners are under 35, which is meaningfully younger than the broader market. The audience is roughly 50/50 male/female because we're helping publishing unlock one of its hardest-to-reach young audiences, which is men. The great news is the publishing industry is growing, and audiobooks remain the fastest-growing segment, with roughly 20%-30% annual growth in the U.S. Spotify, well, we're growing even faster than that. Listening hours grew 60% from 2024 to 2025. Almost half of audiobook consumers started listening within the last 12 months. Our indie title catalog grew 50% year-over-year. As you heard earlier, the economics are working, too. I'm happy to announce that we are on track to reach EUR 100 million in annualized recurring revenue from Audiobooks+ only this July. We're really excited about this product because Audiobooks+ users deliver multiples higher LTV than standard subscribers who listen to audiobooks. What makes this especially compelling is the user behavior underneath it. In the U.S., consumption amongst Audiobooks+ users increased 18% in the first 30 days of purchasing the additional hours. That tells us something important. This is not just another content vertical. We're creating healthy reading habits and high-value behavior that becomes even more powerful when it sits inside the broader Spotify ecosystem. The takeaway is not that this category is mature. It's that it's been underserved, and we're showing the industry what serving it well looks like. That brings me to where we go next. The model, it's straightforward. Whether you're a casual listener or whether you're devouring a book every single week, we want to offer a plan that fits your life. Audiobooks and Spotify Premium builds a healthy habit of listening to books by offering great value to our subscribers and meaningful revenue for authors and publishers. Audiobooks+ drives additional revenue by monetizing heavier users. People don't stop there. Some of these users go on to purchase even more top-up hours. That's why this summer, we're expanding Audiobooks+ with new add-on tiers designed to serve every single type of reader. Like Alex said earlier, you could think of it as Audiobooks++ or Audiobooks+++, I promise you it's not going to be called that, we're going to have a much better name. We'll introduce a number of higher-hour plans, giving our most engaged listeners the flexibility to go deeper and to enjoy even more books. Then launching later this year, family and student plans for Audiobooks+ will bring the experience to entire households and to the next generation of readers. We're of course, building more great tools for those who fuel the books ecosystem. That is, of course, authors and publishers. Spotify for Authors provides direct access to audience data, to growth tools, and distribution. Today, we are expanding Spotify for Authors into 10 new languages, giving authors and publishers the insights and publishing tools to grow their readership now in the language that they work in. For many self-published authors, converting their book to audio in the first place can be a challenge, whether that's a financial challenge or a technical one. That's why we've already invested in publishing programs like Spotify Selects, which provides financial support to make audiobooks for the very first time. We're also rolling out publishing funds in markets like France to ensure that all stories can be heard. Now, to help bring more books to market in audio for this vital group of authors, we're introducing new audiobook creation tools. Starting in June, we are opening an invite-only beta program providing access to best-in-class digital voice technology powered by ElevenLabs. We're building this directly into Spotify for Authors, enabling seamless generation and frictionless publishing. Authors are not locked into exclusive deals. That means they get the widest possible audience for their books, which is incredibly important to them. I'm also excited to share that we're introducing two new features to assist with audiobook discovery. First up, if you're looking for new recommendations, you can ask a question to Spotify. You might ask, "Give me some Scandinavian noir for my upcoming work trip to Sweden." Maybe you're already deep into enjoying an audiobook, you'll then be able to ask, "What else has this author written?" "What should I listen to next?" This summer, we'll bring Prompted Playlists to audiobooks, too, giving users more control while expanding our natural language discovery experience to books for the very first time. If any of you in the room or online run a book club, this could be great for you. I'll give you a flavor of how it might work. You could say, "My book club loves murder mysteries by Agatha Christie or Arthur Conan Doyle," both Brits, by the way, "but we'd like a fresher take on the genre. Give me a list of modern murder mysteries similar to those classics that my book club would enjoy." We'll then create a playlist of audiobooks to fit the prompt. These features and our new plans, they all serve the same goal, which is to help people engage with books more by making the experience feel more natural, more connected, and more integrated into everyday life, all in the Spotify app that hundreds of millions of people already use every single day. Now I'll pass the mic to Katie to walk through how we've rebuilt the Spotify ads machine. Thanks, Owen. Our ads business is built on a simple belief: advertising should respect the user experience. It should feel relevant to the moment, and at its best, become a part of culture rather than an interruption from it. Last year at Advance, we previewed our new tools and tech, which make it simpler to buy, create, and measure. Now, the theme was automation, but the bigger idea was that our ads platform should be built for Spotify, not bolted on Spotify. Today, for the first time, it is. Our tech is now built for Spotify and the 483 million people who use our free tier. It powers advertising across music, podcasts, and video, bringing targeting, measurement, and ad delivery together in one system. Because it was custom-built for the Spotify experience, it's designed to drive outcomes for advertisers while respecting the user. Every day, we use advertising to support the free experience, introducing users to new products and features, and helping free users understand the value of Premium. We've built one of the world's largest subscription businesses by converting the users who start on our free tier. In a way, Spotify is the ultimate proof point for what our ads business can do, and we know we can drive those same results for advertisers. A few years ago, our advertising business was not where we wanted it to be. Simply put, Spotify was not set up for where the market was going. We were too dependent on direct buying, too concentrated in the U.S., and too centered on audio-only budgets. At the same time, marketers were moving toward automated performance-based buying. Advertisers wanted measurable proof that their investments were paying off. We're the first to admit it took us too long to make the shift. The good news is we understood the assignment. We accelerated the pivot and stopped treating culture and performance as a trade-off. Instead, we doubled down on building for both. Now, we have high-impact sponsorships where the world's biggest brands tap into Spotify's role at the heart of culture and fandom. We also have scaled biddable, where advertisers can access Spotify through self-serve and programmatic channels with the automation, measurement, and performance tools they expect. Together, these engines unlock TAM by attracting ad partners who want custom partnerships, outcome-focused performance, or ideally, both. We've dramatically expanded our potential upside. Let me explain why we're so confident in this plan. We're already seeing the early results of our investments. Our biddable channels have grown to more than a third of our ads business. We now operate one of the world's largest global audio ad exchanges. Spotify Ads Manager gives advertisers a first-party path into Spotify, while the Ad Exchange gives programmatic buyers access to our audience through the platforms they already use. By the numbers, active advertisers grew 68% year-over-year in Q1, including through the holidays and into the spring, a strong trend that we expect to continue. The growth is also becoming more global. In Q1, EMEA grew nearly 10% year-over-year. LATAM grew 25% year-over-year. That matters because Spotify is not just a global audience. We are becoming a global ads business. That's crucial for two key reasons. First, more advertisers give us the opportunity to drive price improvements over time. Second, it also means that we are able to more effectively deliver personalized ads to our users. Now, our sponsorship business is also growing. As Roman shared earlier, podcast sponsorship revenue more than doubled year-over-year, showing the power of connecting top creators, deeply engaged audiences, and brands in the moments that matter most. Our direct business is becoming higher impact while our biddable business is scaling demand. The heavy platform rebuild is now behind us, and our focus forward is on accelerating revenue growth and continuing to improve innovation. The first priority is further growing the market for Spotify. We're a category leader in audio for advertisers, and we know that ears can be just as powerful as eyes when it comes to driving successful results through advertising. Our new measurement capabilities allow us to clearly demonstrate that. As we further diversify our video offerings, we will capitalize on growing those opportunities. The new engine of sponsorships and biddable is now running. The second priority is leveraging AI to make our tools even more powerful, taking Spotify's Ads offering to the next level. AI reduces one of the biggest barriers to audio advertising, which is the audio, the creative itself. Roughly 70% of the ads we create for our partners in Spotify Ads Manager are built using AI tools, and we're already seeing the economic benefit of reducing the costs of creative production. To date, we've generated more than 20,000 ads for over 7,000 advertisers globally, and that number is growing. Advertisers can now create scripts, voiceovers, and fully mix with background music without giving up any creative control. AI is also helping advertisers move more quickly from objective to campaign by improving audience discovery, optimizing delivery in real time, and helping us better personalize ad load for each individual user. In practice, that means customizing the volume of ads that each user receives based on their unique behavior on Spotify. The third priority is building new ad experiences that just weren't possible before. Brands can now sponsor playlists, be in the conversation with creators, and as Spotify introduces more AI-powered premium experiences, brands can also sponsor access to those moments. These are not your standard ad impressions. They are deeper, more organic brand integrations that connect advertisers to culture and turn love for Spotify's brand into advertiser value. That's exactly why we expect higher growth in the second half of 2026. Looking ahead, double-digit growth beyond that, and a much larger advertising business over time. When you step back, advertisers have always loved Spotify for our passionate audience, our deep engagement, and the role we play in culture. Now, we have the ads platform to create advertising experiences which fully harness that power. This strategy will drive better outcomes for advertisers, better experiences for users, and better monetization for Spotify. With that, I'll hand it to Gustav to take you under the hood of the intelligence system that powers what we're building next. Thanks, Katie. 3.4 trillion data points from our hundreds of millions of engaged users every day tell us where we should go next. That's how Spotify has evolved into a product that others try to replicate but often struggle to match. Let me take you under the hood to see what drives that advantage, our intelligence. Just a few reminders. As I said in my earlier remarks, we know that we need general LLM reasoning across facts and domains like math, coding, et cetera. Today, we're buying that and benefiting from that price performance cost curve. We are instead spending our resources on building and training a Large Taste Model, an LTM, using our proprietary data. Let me explain a bit further for you. A traditional language model learns patterns in text by predicting the next word at massive scale. Our LTM actually goes a bit further. It understands not just text, but also every historical user interaction and every piece of content on Spotify. Our advantage isn't just in architecture or knowledge and keeping secrets. It's in the data, both historical but also ongoing. Training these models requires billions of real user behavior sequences over long periods of time, literally years. Unlike the static factual knowledge in an LLM, like the capital of Texas, taste is constantly evolving, so the model also needs to continuously learn from processing trillions of new signals. You simply need an insanely active user base every single day to stay relevant in taste. There isn't just one data set, actually. There are several that we need to combine into the LTM. First is that behavior layer that I just mentioned, the billions of historical user sequences and trillions of daily data points. Second is the metadata layer. That's all the licensed and acquired foundation that maps hundreds of millions of pieces of content across our three verticals, along with all the rich metadata and engagement signals that power the Spotify experience. Third is the creator layer. Less visible maybe to you, but equally important. In fact, you may not know this, but we have proprietary tools developed by us, used by millions of artists, authors, and podcasters along with their publishers, labels, and distributors. These applications generate unique data that powers capabilities like SongDNA, where they correct their own catalog, et cetera, and further strengthens our recommendations and discovery. Fourth is the cultural layer. We're using systems that understand what is happening in the wider world, going outside of Spotify every day to inform features like About the Song or Prompted Playlist about what happens in the world in real time. It doesn't actually stop there. Combined with modern reasoning capabilities, this understanding is actually interactive, not just static. Users can ask for example, as Maya said, a workout playlist tailored to their specific habits or discover books, as Owen said, that fit their exact taste. This result is not just prediction, but the ability to actually shape and generate experiences in real time. That's how we think about the LTM. Not a standalone system, but a fusion of proprietary taste understanding with advanced reasoning. This is where the economics come into focus. AI isn't just a cost layer for Spotify. It's a product and monetization layer. Our early model deployments are already improving the quality and effectiveness of our personalization, driving meaningful gains across the platform. This includes an almost 10% growth in auto-play song saves, almost 10% improvement in podcast discovery from home, and close to 20% increase in users interacting with DJ suggestions. This is a really big deal that has real implications for retention and lifetime value across our entire user base at scale. Beyond improving the core experience, our Large Taste Model is also enabling entirely new kinds of products, including Prompted Playlist, the interactive DJ, Taste Profile, and many of the generative experiences that you've seen today. Already, these newer AI-powered experiences are being used monthly by nearly a quarter of our U.S. Premium users. Large adoption. When cost per interaction continue to decline and usage expand, users get more value from Spotify. We gain more opportunities to capture that value over time. As Maya and Charlie showed, with personal podcasts and new music fan tools, we believe experiences like these will naturally expand users' willingness to pay. This allows us to scale a tiered model and turn intelligence from a cost driver to a revenue driver. There is intelligence in free, there's more of it in premium, and higher intensity experiences available as add-ons. As costs come down, we can expand these offerings while improving the value. As we said earlier, many times by now, willingness to pay is not an average. It only looks that way when you happen to have a single price point. In reality, it follows a power law with usage intensity and willingness to pay scaling together. I'm not just making that up. AI has already proven this. If you look at the leading LLM products, they are aggressively priced as a power law across usage tiers because their heaviest users get meaningfully more value and are willing to pay much more. That is why we see AI as an opportunity, not a drag. Better product, more value captured, strong margins. That's the model. That's what Niklas will show next, how we're putting this into practice to deliver more value faster and more efficiently. Niklas. Thanks, Gustav. Now that Gustav has walked you through the Large Taste Model, I'll show you how we leverage AI to build and ship, and why it's so difficult to replicate. Let us start with how we build. As Nat and Nicole shared, this is not just about productivity. It's about what becomes possible when capacity is no longer a constraint for us. Our engineers are spending more time on high impact problems. AI is embedded across the entire workflow, and we've extended its utility with our own internal systems, making it secure and scalable. Honk, our background coding agent, is a strong example. It builds on leading coding agents, but it's tailored for Spotify, running persistent cloud sessions so engineers can seemingly switch devices, collaborate in real time, and automate routine work. We're seeing up to 90% reduction in the time spent on common maintenance tasks, freeing developers to focus on user-facing innovation. Tasks like dependency upgrades and migrations now run fully autonomously, allowing teams to move even faster with less friction. I've been building software for over 30 years, The AI transition that we're going through now is like nothing I've ever seen before. Today, more than 99% of our developers use AI weekly. Coding productivity is up 76% since last year, from what was already a very high level. More than 73% of our code contributions are AI assisted across more than 4,500 production changes that we ship every day. At the same time, quality remains stable. In fact, as I've been preparing this presentation over the last few weeks, we've had to change these numbers multiple times because they keep going up. We're no longer primarily scaling through headcount. We're scaling by increasing the impact of the people that we already have. You can also see this in our economics. Revenue per engineer is rising. Each engineer's work reaches more users and supports more use cases. Our ability to scale our R&D has changed with AI, and once these systems are built, the cost to serve each additional user will further improve. In practical terms, one engineer now supports more output, more features, more services, and more user value. The same team can power a broader and more complex set of experiences. Next, let's take a look at how we ship. As Nat mentioned, we moved beyond traditional prototyping. Today, anyone at Spotify, not just our engineers, but also our product managers, our designers, and business leaders, has in fact all the way up to our executives like Gustav, can and do build working prototypes right on top of our production code base. Our real data, our real design system, all running inside our actual app. We have an internal app store where these prototypes can be discovered, installed, and tested, all kept in sync with our live code base. Ideas are now tested in real conditions and with far fewer resources than before. What used to take weeks can now be validated in minutes. For most of the streaming era, platforms had a wide downlink and a very narrow uplink. We could deliver millions of pieces of content, user could only respond back to us with a skip or save or like. We then had to infer their intent. Gen AI changes that dynamic, making the system interactive. We move from guessing to understanding and from one-way consumption to real-time collaboration, with users telling us what they want in natural language. Today, you've heard about DJ, Prompted Playlist, and Taste Profile. Together, they represent a shift towards a more interactive and user-controlled Spotify. Today, I'm very excited to tell you about how this shift is coming to life in Studio by Spotify Labs, a standalone desktop app that takes personal podcasts further. It will be available soon as a research preview for premium users in more than 20 markets. Studio understands your Spotify taste across music, podcasts, and audiobooks. It can draw on world knowledge, and with your permission, connect to services like your calendar, inbox, notes, and feeds. You simply ask for what you need, like a briefing for your day or an overview of your weekend plans, and Studio creates it for you. Because it's built for Spotify, the output can be saved directly to your library, where your personal private content lives alongside the music, audiobooks, and podcasts you already love. By understanding, building, and shipping faster than ever, Spotify is becoming the home for personal media. Not just what already exists, but what users create and carry throughout their day. Finally, let's dig into what sits underneath all of this. Gustav described our Large Taste Model and the data advantage behind it. Let me show you what's actually inside. The model is trained through continued pre-training on our proprietary data set. Every track, artist, and podcast in our catalog is mapped to a learnable token that captures both what the content is and how users engage with it. Like traditional recommendation systems that predict from historical patterns, the model generates candidates directly, much like a language model generates text. This is the architectural shift that makes the generation era Gustav described technically possible. That is also what makes our agent fundamentally different from a generic AI assistant. Most start from zero every session. Spotify reasons natively over taste so that conversation reflects years of real listening behavior, not just a prompt and a search query. What we've built is not just a model. It's a system where data, models, agents, and our engineering platform work together to deliver personalized experiences at scale. Because it runs on what we believe is the world's largest licensed audio and taste data set, it compounds. Every interaction improves the model, and every improvement can reach hundreds of millions of users through a single platform. Because this system is built on licensed data, trust is foundational. Spotify's role is at the center of the ecosystem, strengthening the connection between creators and users, rather than abstracting away from it. This is what we mean when we say that Spotify does not rent the future. We build it. Now over to Christian. Hello, everyone. Nice to see you all here today. Before I start, let me tell you that all growth rates that I will be referencing are on a constant currency basis, unless otherwise said or noted. I wish I had cool guys telling that instead for me, but next time maybe. Differentiated experiences creates differentiated economics. Here's what ours looks like. Four years ago, we made a commitment: turn Spotify into great business by growing music, scaling our podcasting into profitability, and launching accretive new verticals like audiobooks. We delivered, and today we are stronger than ever, proving that we can scale efficiently and we can monetize effectively. As you heard, monetization starts on the top of the funnel, where we delivered a healthy 17% CAGR in users over the past four years. Growth is coming from every region, taking us to more than 760 million users, MAU, globally as we continue progressing towards 1 billion users and beyond. That scale has been a key driver of our healthy subscription business. It's grown at 13% CAGR to nearly 300 million subscribers. Engagement remains strong and continues to deepen. The number of subscribers using Spotify more than 28 days per month across multiple devices and verticals is growing. That breadth and frequency of use is a powerful drive of retention. Those fundamentals, scale, engagement, and retention, that drives our financial model. Here's what that means for our performance. Alex talked you through targets we set forth in 2022. The results speak for themselves. 18% CAGR, more than 7 percentage points of gross margin expansion, and nearly EUR 3 billion in free cash flow generated in 2025 alone. It was the result of a disciplined financial model. Targeted investments into music business, audiobooks, video podcasting, and the beginnings of our AI capabilities that we heard about today. As the impact built over time, we stayed patient. Today, Spotify generates meaningful cash flow, and we are entering this next phase from a position of real strength. Our advertising business grew at a 10% CAGR, even as we were re-platforming the ad stack and absorbed the short-term pressure that came with it. That work is important because it positioned the business for a larger opportunity. Gross profit grew faster than revenue at 23% CAGR, with gross margin reaching 32% in 2025. About one-third of that came from the music business, and with the rest driven by podcasting and audiobooks. Today, both music and non-music verticals together operate above 30% margin. In 2025, the gross profit we generated from Marketplace was four times higher than 2021. Our offering of artist tools and licensing initiatives continues to create value for both artists and for Spotify. At the same time, we maintained a tight control of cost. Operating expense growth has remained essentially flat since 2022, as the inflationary increase in R&D and sales and marketing were more than offset by the 23% reduction in full-time headcount. That discipline delivered over 18 percentage points of operating margin expansion since 2022. Combined with our revenue growth and gross margin expansion, this moved us from a loss-making position to generating EUR 2.2 billion in operating income 2025 at 12.8% operating margin. All of this fundamentally has reshaped our free cash flow profile. In 2025, free cash flow margin reached approximately 17%. That strengthened our balance sheet, and it gives us the flexibility to invest in what comes next. Before we look ahead, let me briefly outline how we think about return on investment. It shapes our financial strategy. At Spotify, we invest where we can generate returns above our cost of capital, and we stay disciplined everywhere else. What makes our business unique is that the most reliable leading indicator of a return above WACC isn't always IRR on a spreadsheet. It's an increase in customer lifetime value. You heard the mechanics throughout today. The KPI we underwrite are centered on engagement, revenue, efficiency, and retention. Our bets from Audiobooks+ to DJ to Reserve have clearly quantified targets tied to those drivers. It's the way these bets build on each other over time that drives lasting improvements in LTV. This creates a direct chain to free cash flow growth. In the U.S. alone, our largest market, customer LTV has increased by more than 70% since 2022. We see similar trends across markets of every stage of maturity, from developed markets like Sweden to faster-growing markets like Brazil and India. AI accelerates our ability to make these bets with even greater velocity. Our bar for returns stays the same, and the direction is clear. Unique economics is keeping improving. Let's look at what this framework will produce by 2030. First, we are targeting a mid-teens revenue CAGR. The drivers are clear. We believe we're on our way to 1 billion MAU. We have emerging and developing markets as twin engine fueling growth in subscribers. Subscriber retention is already best in class. We see opportunities to improve it even further. ARPU will become a more meaningful growth driver, supported by thoughtful price adjustments, more defined product tiers, and an expanding mix of add-ons and à la carte offerings. This applies for both Premium and add-on-supported users. Our clear success with Audiobooks+ shows what's possible when we deliver for super users. The add-on opportunity is significant across music, podcast, audiobooks, and beyond. AI will enhance this opportunity and our already best-in-class personalization. We plan to build on this momentum over time, unlocking new, scalable ARPU streams across the platform. We also expect our advertising business to re-accelerate growth into the double-digit range. We expect that to start ramping towards these levels in the second half of 2026. More users, more advertisers, better monetization per impression. Let's talk about where we're going with profitability. We expect gross margin of 35%-40% by 2030. Within Premium, music has further room to run, supported by Marketplace and add-ons. Our higher-margin non-music offerings expand to more markets and monetization deepens. The favorable revenue mix shift will drive further improvements. In ad-supported, the story is automation at scale. We expect music margins to continue to improve, particularly in emerging markets and through Marketplace. Podcasting has made significant progress moving from a deeply negative in 2021 to what we believe will be more than 20% in 2026. From there, we expect it to grow. Long-term, we see a path for 40% driven by both first and third-party content. At Spotify, we manage cost with rigor and with constant focus on efficiency. That discipline underpins our ability to scale financially. It gives us both speed and flexibility to invest where we see strong returns. We see strong returns potential, we will go there. In 2026, we are investing in areas where we see clear returns. As we mentioned on our last earnings call, the OPEX will step up. We have told you that for quarter 2. It will step up in quarter 2 and quarter 3 before moderating into quarter 4 and 2027. This represents a temporary increase of roughly EUR 200 million on marketing and R&D. We will naturally calibrate these costs as we move through this short-term increase. As you have seen from us over the last four years, we always strike a balance between investments and ensuring sustainable margin expansion. This will not change going forward. On the marketing front, we are investing opportunistically to drive conversion and increase LTV featuring key product enhancement. Our focus on differentiation, conversion, and retention is why we continue to add value to Premium. This enables monetization over time. The customer acquisition cost is incurred upfront. We know that. The payoff comes from higher LTV, growing revenue at scale, in addition to improving sales and marketing leverage. Our AI R&D spend has two pieces. The first one is somewhat front-loaded, and that is primarily the large taste model like Gustav just talked about. This will drive improved personalization and scale the new add-ons. The second one is ongoing, recurring developer usage of AI like Claude Code. This will lead to shorter build and ship cycles. Our global scale makes distribution and monetization of every new product more efficient. As these two forces compound, we will see accelerating LTV expansion, shortened payback periods, and improved operating leverage. All of this points to an operating margin of at least 20% 2030. Before we get into free cash flow, just a couple of words on our taxes. We estimate our normalized P&L tax rate to be around 22% and foresee that we will become a full taxpayer by 2027. On average, over time, we estimate our cash tax to be around 90% of our P&L tax rate. That leads us into the free cash flow. We have a capital-light model, favorable working capital dynamics from upfront customer payments, and one of the world's largest free paid subscription business. Our operating improvements directly translates into cash flow. When gross margin expands, it flows. When LTV improves, it compounds. We expect free cash flow to show strong growth through 2030. Our free cash flow per share will be part of our scorecard going forward. Free cash flow per share is the metric that tells us without ambiguity whether we are allocating capital well, executing the model, and drive value creation. It's gone from around 0 in 2021 to approximately EUR 15 per share today. Now let's talk about capital allocation. You all know we carry cash and short-term investment balance of EUR 8.8 billion today. With a free cash flow development, that means that this balance could grow considerably over the next few years. Simply put, capital is not a constraint. That said, we will remain disciplined in how we allocate capital guided by a clear ranking. We will keep a strong balance sheet that gives us flexibility and supports the execution of our strategy. This enables us to move on the right opportunities, even in a constrained market condition. First, we will continue to invest organically for growth that drives long-term value into R&D, content, marketing, and new verticals. Wherever we have a clear line of sight on returns above cost of capital. The LTV framework is our real-time signal, not a projected spreadsheet. Our bias remains towards build first as that remains our core strength. Second, we will allocate capital to acquisitions when they can accelerate our strategy. The bar is consistent, returns comfortably above our cost of capital with a clear path to cash flow accretion. Third, capital to shareholders. We will of course continue to repurchase the equity compensation we grant employees annually. This protects against dilution. It is currently below 1 million shares per year. Given the stronger cash flow in the years ahead, even with M&A, we expect that we will also return excess cash to shareholders. This will be over and above the anti-dilution baseline. The thesis is straightforward. Deploy capital where returns are compelling, stay disciplined where they aren't, and allow free cash flow to build over time. Four years ago, Spotify made a commitments. We delivered. What you heard today is how we run the same machine over the next five years, not as an aspiration, but as an extension. It's an extension of the framework we have been operating and refining for many years. Now back to Alex and Gustav. Okay, this brings us to the close of our presentation. Hopefully, after today's update, you have a clear picture of Spotify's future. The scale that we have built unlocks vast opportunities for value creation. The world is moving in our direction towards more personalized experiences, more interactivity, and more control. These are areas that we know we can lead, because living in the future has been part of our DNA for a long time. Never getting comfortable. Yeah. Looking to see where technology, behavior, and culture are heading before it becomes obvious to everyone else. That instinct has shaped some of our biggest decisions over the years and enabled us to define and build for what comes next. What matters most in this next chapter, taste, trust, culture, has always mattered to Spotify. It is why we exist. It is where we succeed, and it is what we will continue building for. That's what helped us build lasting differentiation, increase our engagement, and evolve the business over time to not only meet, but actually exceed the expectations of our hundreds of millions of users. Remember, we started with access, we moved to personalization, and now we're going into generation. Each of these transitions has expanded what Spotify can become. Every time, our advantage has compounded because the generative era rewards scale, data, and deep user understanding more than any era before it. What excites us most about this journey isn't any single feature. It's the entire foundation underneath it all. We're very proud of what we built, and we're very proud of the teams that you've met today. We're even more excited about the next 20 years. We will continue to raise our ambitions. Thank you. Now let's take some of your questions. All right. Thanks, Alex and Gustav. We are going to start the Q&A session. We're going to take questions from the room. We'll call on you. We'll have mics circulating. Please introduce yourself and your firm name. We ask that you please limit yourself to one question so we can get in as many as possible. Why don't we start with the first one here from Steven Cahall. Do I need a microphone? Microphone's coming over here. Thank you. Steven Cahall from Wells Fargo. I know there's going to be a bunch of questions around the UMG deal that you announced and the ability to create AI music. Let me see if I can just cover all of those in one giant question. Thank you. Let's try. Yeah. Wondering how you're thinking about pricing for this add-on? How should we think about how it impacts your gross margins? Will this be rolled out globally? Do you see this as paving the way to sort of a fast follow with the other major labels? Maybe lastly, will we be able to share it on our TikTok feeds? Thanks. I'll start, Steve. It's a good question. Basically, you had probably 20 questions in there packed into one. I'll start, and maybe you can jump in as well. Today, this marks a landmark deal for us with UMG. I'm very pleased with where we are. We're not going to talk about the specific details of it, I'll break it down to you in at least how we're thinking about the whole sort of ambition here going forward. The first thing that we've done is basically we have created the first really legal alternative here to create remixes for fans and users to create remixes and covers. The second thing that we did here was actually to create a licensed and controlled medium for artists to actually participate in artificial intelligence. Now, we all love covers and remixes, that's proven. It's largely an untapped opportunity, because there isn't really a scaled way to make money on it. What we did today was basically to unlock that opportunity. I think this is going to be additive both to artists, songwriters, the community at large, Spotify, rights holders, and so on. We're very pleased with this. You can talk a little bit about how we plan to launch the product and so on. I want to say also that this is also the first time where Spotify does not need to have everyone to launch a product like this. That said, we don't want to leave artists and people outside of this. Of course, we're welcoming everyone and we want everyone to be part of this because we believe this is one of the greatest products we've built. It's pretty unique for us to not actually need everyone to get started. We're excited about the opportunity. A couple of more things. We don't want to go into the economics, but you should expect this to be at least moderately neutral to accretive to us. We just don't do deals that are bad for any of us, which is one of the reasons why we spend so much time on getting these deals right. A couple of things that I think are important is the incentives here. So far, AI music has mostly been about net new music, right? Meaning when you create a song that didn't exist before. Those can be new creators, those can be existing creators using those tools. Largely, existing catalogs and creators with most existing catalogs have been left out completely. It's really only about replacement for them. We think net new music is happening. There are many companies doing this. This music gets uploaded to Spotify. That is happening. This other part was just not going to happen without us. It would not happen by itself because, as Alex said, there was no legal framework. We think the opportunity is very large. If you look at other media types, existing IP in TV and movies is usually considered the most valuable rather than the least valuable. As Alex said, you can see artists doing remixes and covers today manually because it is a way for them to get rediscovered and get more stream share. Typically, one song can become maybe three remixes or four remixes and maybe even five covers. With this, one song becomes 10,000 songs, 100,000 songs, paying tribute you know, being playful with the original. I think that's important because if you look, why would people want to do this on Spotify? If it's about getting a share of the revenue pool, you want to get the largest share of the largest revenue pool. We are by far the largest revenue pool. We think this is what we should do and what we're going to do better than anyone else. To answer some of your other questions, creation will be an add-on. You will be able to do some creation in Premium and so forth. As you know, Alex here has worked for, what is it, 17 years on finding the perfect conversion points between free to Premium to the next. We're going to find the right conversion points, but creation is a Premium add-on. Consumption is not a Premium add-on. Anyone on Spotify, Premium and free, can consume. I think it's very important that if you take the time to create a cover or remix that you love, you can share it with anyone. Because the free tier is free, literally anyone can consume. All you have to do is to install Spotify Free to hear it. You think about the catalog as one that's going to not just expand but multiply. With that comes usage, with that comes monetization and further unlocks. Right. Did you get some answers at least to the 20 questions? Good. All right. Thanks, Steve. Let's go next one right here in the front. Rich? Since that was 17 parts, I'm going to ask two. OpenAI believes in two to three years, we're going to go to an agentic world. No one's going to use apps. Apps will fade away. I don't really understand why I would use OpenAI to listen or watch music, given everything you just showed on stage here today. They obviously have a biased view, I'm just curious, not just OpenAI, but just the LLMs and foundational models in general. What is that tension, who owns the customer, and how do you think about playing in that world of LLMs over time? Is that a risk or a tailwind, how do you think about it? Just two, because I've really been thinking about it this whole meeting. The ticket thing is a really interesting take on giving fans tickets. Obviously, a small number of tickets, but if I am a free user, I upgrade to Premium, and then I find out I don't get my Taylor Swift ticket. How do you not get pissed off Premium subscribers? Thank you. I can start with the second one first, actually, if you want to. People usually only remember the second one. The way we think about tickets and Premium is there's never going to be enough tickets for everyone in Premium because the arenas have a finite amount of space. We are talking about us holding millions of tickets. This is not a small lottery or something. We'll make a lot of people very happy. There was never enough space. The problem was there was never enough space, and it was deeply unfair who got that space, right? It was the scalpers. It was the one with the most money. What we are doing is we're bringing fairness to this, right? We're taking the actual fans to get those tickets. That's how we're thinking about it. It's also important to remember that you are not paying for this. You just get it in Premium, right? I think if you were paying extra for this and you haven't got it, that's very different. You are not paying extra. You're paying for the tickets, but you're not paying for the reservation. We think people will be very happy about this because it's something they just get, and two, we bring fairness to this system. Frankly, this is one of the most lovely improvements to Spotify Premium since our founding. It truly is, right? We know this because we've done our research around this and tested it with some people. Because of the scale, we can get very, very precise on what people enjoy or not. Even you asking that question straight out and, you know, is a reaction to how good this is. Obviously, it's not just the fans that get happy. The creators, they get very upset when their biggest fans cannot come to their shows. Everyone there gets happy. Now, I was not trying to avoid the other question. Let's go back to the other question which was, the LLM saying that all apps disappear and so forth. We obviously don't believe that all apps disappear. We do think that it's getting very cheap to write software, which is a tailwind for us that we're riding. The way we think about this, and we always have, is our ubiquity strategy. Spotify needs to be where users are. If you look at our history, I think one of our biggest success recipes has been that we always partnered. Interestingly, we always partnered with our biggest competitors. An early landmark partnership was Facebook, now called Meta. We also partner with Google, who's one of our biggest competitors in YouTube. We partner with Apple. We partner with TikTok. We partner with everyone. The whole idea is to be where users are, right? Because there's a lot of discovery happening there. Now, to answer your question, there's also a lot of creation where people are saying, "Couldn't I make a playlist of this?" OpenAI knows that they're into this. Can they get a podcast from Spotify on that? We just see this as the next Google search. It was very important for us to rank highly on Google. It's very important for us to rank highly in these LLMs. For us, this is just more ubiquity. Hopefully, after seeing what we did today, you understand that we feel quite comfortable about the unique advantages we have. Yes, we are great at building software and product, but we also have an enormous amount of personalization data, where the biggest companies in the world have tried to beat our personalization for soon 13 years at least, and have not. We also have enormous amounts of license data. That is the Spotify value, the personalization, and we're not giving that data away. Last, I would say Spotify was always in the background, right? We were always soundtracking all the other experiences. We were never reliant on actually being the foreground app. To soundtrack your OpenAI or Claude session, we think is actually fantastic for us. That's how we think about it. All right. Thank you. We'll let this mic circulate. Let's go to the back here. Michael Morris? Good afternoon. Thank you. I'm Michael Morris with Guggenheim. I wanted to ask you about the freemium funnel and the conversion. A couple questions there. First, you did enhance the functionality of the free tier last year. I'd love an update on how that's progressing with respect to what you wanted to see in the conversion to premium. The second, you made a comment earlier that AI is accelerating with faster localization and personalized services. My question there is, when we think about that conversion from free to premium, I think generally we've thought about the economic sensitivity, but apparently you see something in addition. I'd love to hear how the investments that you're making and that AI's helping with, and that localization can drive even more conversion if that's in fact what you're expecting. I'll start with the first one. Then maybe you can jump in on the second. You heard us talk about growth, and many people have asked me throughout the years, "How do you grow Spotify? How come you guys have hundreds of millions of users and hundreds of millions of subscribers? How do you actually acquire users? What's the secret?" That second part of the question is a misunderstanding of how growth works, right? The way super scale growth works is that you actually start with engagement. You start with engagement in the way that we talked about engagement. We're not in the business of just maximizing number of minutes. We think about days in a month, which is really a proxy for contexts, right? Different contexts you're in. If we can be in as many contexts as possible, being as many days as possible in a month, then that's the right engagement. Any product we build or develop starts with us thinking about how can we get you to interact with us more days in a meaningful way. The new free tier addresses exactly that. What you're seeing basically is not just, in the years prior, where we have consistently increased engagement across these axes of days and devices and verticals. What you're seeing basically is us taking a step change. That's why you've seen us in some earnings calls, we've been talking about how we've been beating the MAU growth, versus even our own expectations really. That's the result of improving the free tier. Once we have people on the Free tier, you know exactly as I, that what we focus on is actually to build out the differentiated proposition of Premium to get them to come on board, right, and come on board the paid experience. That is also why I think you've seen some of the stuff today, like Reserves for instance, that someone here asked about and so on. Those are all investments into making Premium even more sticky and the conversion from Free happen in a much more sort of pre- scaled way. Can I ask you on the other question you had about AI and free, can you repeat that? I'm not sure I understand exactly. Sure. I'd like to understand the conversion of free to premium and the potential for that conversion to become stronger as a result of what you described as the faster localization and personalization by AI. Sure. Sure. As Alex said, Alex comes from the gaming business. That was many years ago. That was 20 years ago. Did I? Yes. What you know there is you need to start with engagement, as you said. What we've said for now at least the 17 or maybe 18 years I've been here, is that the only thing that was very predictive of how much you're going to pay is how much you play on the free tier. More engagement drives more conversion, which is a shock to some people because they think you should cap the experience and push people over. That's the wrong way to think about it. You're not going to start paying for something you don't use. You need to first use it all the time, and then you need to find good pay gates. Like for example, you don't want the ads anymore, you want on-demand, you want offline and so forth. We need to get people deeply engaged. First, you need to get them to care deeply, then you ask them to pay. The key driver to that engagement is personalization. We see it clear as day. I showed you the metrics. We increase personalization, you listen more. Your propensity to say, "This is actually worth EUR 6.99," goes up. It is a very direct relationship. The more you play, the more you pay. We still need to have good pay gates and as you know, we pay gate on functionality, not on content. You have the same content in Free and Premium, and that's so that we can get you as engaged as possible. The localization bit is obviously a balance that we strike between a number of different things. One is language, of course, which has never been very costly, but something that's just simply is much faster and much better. Right? You no longer have broken sentences in Finnish and in Hindi and so on. That's immediately addressed and something that is hygiene. Number two is culture, of course. There we have actually great signals from our teams around the world, the editorial teams that we also talked about, how that kind of feeds back into the model and helps us personalize even better. Really the content signals and the cultural signals that are coming in from the outside feeds our Large Taste Model even further, which then gives you that upside on personalization which then gives you that additional engagement, and then gives you the conversion. There's one more concrete example that I think is important. I just said that we need to get you engaged, and to get you engaged, we need to personalize, but then we need to understand what you're into. For a long time, we worked with onboarding flows. You would click, "I'm into these artists," and so forth, which had some efficiency, but mostly you just had to use it. You had to use it a lot before we started to understand who you were, because we only had a few skips. In the previous free tier, we didn't even have on-demand, so it was a pretty weak signal. We suggested something, and maybe you skipped. It took a long time to understand who you were. What is interesting with the localization of AI is now we can ask you in English, just tell us, just spend five minutes in English writing who you are and what you like. Now we can deeply personalize to you very quickly. That's another clear example of the fact that we can now act in many languages means that we can personalize much, much faster. All right. We've got time for one or two more. Why don't we go here in the middle with Jessica? Thanks. Jessica Reif Ehrlich from BofA Securities. There were so many products introduced today, which is a bit of a surprise obviously all about driving engagement and monetization. Just wondering, you didn't say anything about pricing, if you could say anything about how you're pricing these tiers, what's your philosophy? Will you have multiple super premium tiers at different price points rolling? How do you think about it globally? On the engagement side, you talked about it's basically every day people are on. Almost every day. What can you say about the daily use engagement? Is it two hours? It just drives everything, not just staying on the platform, it just drives advertising as well. Yeah. Okay. Let me see there. You had a couple of different questions in there. I'll bring you back to something that we've said many times before. The one thing that we tracked very closely is what we call value to price. All the way from basically the founding of Spotify until 15, 16 years later, we just focused on the value, not so much the price. Value over price just went up and up and up and up. Spotify became the greatest music product in the world as a result of that. Now, something else actually happened, and that's that we created these plans, these multi-account plans. That actually pushed price down slightly. What you had was basically a ratio that just skyrocketed. Both the numerator was going up, and the denominator was going down. It's a good recipe for increasing the ratio of something. What then happened, if we take ourselves back three years, we started raising price. That value to price came down slightly without really a big loss of subscribers. Rather the opposite. Even us, we were surprised that the churn was so minimal. Then we went back, we invested more into value, we did another price increase, it dropped again, we increased more in value. What used to be just a straight line of value to price increasing has now become a more moderated, sort of almost like a up and down sine curve that's sort of pointing into the future. The way we think about it in the end is that the consumer or the subscriber user should always win. That is our focus. We will monetize when we need to so that we can invest back into differentiation for the whole ecosystem, not just Spotify Premium, but also free. Now, when it comes to different add-ons, you can actually look at Spotify Premium as almost like a mosaic of different niche audiences. 300 million of them. We talked about the power law usage curve, demand curve earlier today. That has opened up our eyes tremendously as we've scaled. What used to be a niche audience that we had, which was thousands of people, we were never interested in building a product to harvest that or to convert that person. It's too small. Even the smallest niches are now in the millions for us. For us, it makes a lot of sense to look at this demand, this specific niche demand, and then we create specific products for them to engage more and then monetize more. That really is how we think about it. This next era is going to be about the segmentation of our 300 million strong and growing subscriber base. Instead of thinking about it as one add-on tier, like the sub-premium idea, just think of it as audiobooks as a sub-premium for super audiobooks fans. We just presented a personal podcast add-on. We also presented a creator add-on. It's just many of them. The whole point of super fan engagement is that everyone is not a super fan. There are going to be multiple add-on products that are priced, as you can see with Audiobooks Plus, you kind of gave away, there are going to be Audiobooks Plus, Plus, because the engagement in there differs, right? You're going to see multiple of them priced for those segments. Some more expensive because there's more willingness to pay, some slightly less. That's right. Next. Great. Okay. We've got time for one last question. Let's go over here to Justin. There you go. Justin. All right. Thank you. Justin Patterson from KeyBanc. I wanted to go back to just touching on taste a little bit more. You mentioned Studio by Spotify Labs. That seems like something that really broadens your corpus of information about the user and feeds into the broader AI personalization. Just would love to hear more about how you're really positioning the app going forward to ingest more of this data and take people through what sounds like it's going to be a more complex user experience. Just making sure you're taking that good signal from the user and then surfacing the right information at the right time to keep growing more of those moments each day. Thank you. Yeah. Yes, we are very excited about the fact that it's so easy and cheap for us now to learn much more about the user. This is why I said one way to think about generative era is that computers understand English. I've been doing deep user research interviews with 10 users for the last 17 years trying to understand them deeply and then saying, based on these 10 users, let's guess that the other 599 million are similar, which is not true. Now we can do a deep user research interview with every user, every day, because they're talking to an LLM. That makes me very excited. This is truly deep personalization. What is interesting, though, that we see with the DJ and from the playlist, people are telling us enormous amounts of things about their lives, right? When they're asking for podcasts, when they're going for a run, when they're asking for books, we learn so much more about them. All of a sudden, this data that maybe only Google had, we're getting an enormous amount of this. We're starting to learn a lot more about our users. Now, as you said, with Studio by Spotify and also what Maya showed, personal podcast, people are now starting to upload PDFs and personal content. We only had public content before. We are very quickly learning much, much, much more about our user base. That makes us very excited. We think we have a very big potential there. I want to touch on the other question you have of complexity. This was a contrarian bet that we made some years ago and went into podcasts where everyone said, "Clearly you're going to build a separate podcast app," and then sort of clearly you should have had a separate audiobooks app maybe. By then people had understood the strategy. Our intuition then, which I feel has been very vindicated now with the question you had, Rich, about software doing more, was that it's just software. Shouldn't the software adapt to the user instead of the user adapting by switching software? Shouldn't the skip button turn into a 15-second scrub button? Shouldn't it turn into a chapter button when you listen to books? Software is getting more malleable and now we're even entering the era of generative UI, not less malleable. My job of keeping the complexity down and serving many different use cases actually gets easier and easier, not harder. I think we're on the right strategy. If you think about what these others, Anthropic and so forth, they're also super apps. They're trying to serve many different use cases, right? This is the opportunity that we have as well, to just be able to serve much more. The whole point is to leverage your existing distribution. You want to bring something to 760 million users day one, not zero users in the App Store. We still think about that strategy, but we actually think it's more vindicated now and it's easier to do than before. Great. All right, thanks, Justin. Thank you, Alex and Gustav. That concludes our Q&A session. Thank you, everyone. Thanks everyone. Thanks for coming. For spending your morning with us. We appreciate your interest in Spotify. Thank you.

Speaker 2: Good morning. I'm Bryan Goldberg, head of investor relations at Spotify. It's my privilege to welcome everyone in the room and on the live stream to our 2026 Investor Day. Over the next several hours, the Spotify management team is going to be providing a detailed look into our business, where we've been, where we are today, and the growth opportunities we see ahead. Before we begin, we are going to be making some forward-looking statements that are subject to risks and uncertainties. Please review the safe harbor statement on the slide behind me. If reading's not your thing, then simply listen to the Snoop Dogg. Good morning. good morning I'm Bryan Goldberg, head of investor relations at Spotify. i'm bryan goldberg head of investor relations at spotify It's my privilege to welcome everyone in the room and on the live stream to our 2026 Investor Day. it's my privilege to welcome everyone in the room and on the live stream to our 2026 investor day Over the next several hours, the Spotify management team is going to be providing a detailed look into our business, where we've been, where we are today, and the growth opportunities we see ahead. over the next several hours the spotify management team is going to be providing a detailed look into our business where we've been where we are today and the growth opportunities we see ahead Before we begin, we are going to be making some forward-looking statements that are subject to risks and uncertainties. before we begin we are going to be making some forward-looking statements that are subject to risks and uncertainties Please review the safe harbor statement on the slide behind me. please review the safe harbor statement on the slide behind me If reading's not your thing, then simply listen to the Snoop Dogg. if reading's not your thing then simply listen to the snoop dogg

Speaker 21: Hey, hey. What's cracka lackin'? It's your boy, Big Snoop Dogg, and you already know the vibe. Welcome to Spotify Investor Day. Before we slide off into all of that good stuff, I got to lace you up real quick with a little something we call the safe harbor. Yeah, stay with me. Look, today you're going to hear some forward-looking statements. That means we talking about where the company might be headed, projections, expectations, estimates, and all that future talk. Let me keep it real with you. The future ain't set in stone. Things can change. Actually, results could come out looking real different, materially different from what's being discussed today. Hey, hey. hey hey What's cracka lackin'? what's cracka lackin' It's your boy, Big Snoop Dogg, and you already know the vibe. it's your boy big snoop dogg and you already know the vibe Welcome to Spotify Investor Day. welcome to spotify investor day Before we slide off into all of that good stuff, I got to lace you up real quick with a little something we call the safe harbor. before we slide off into all of that good stuff i got to lace you up real quick with a little something we call the safe harbor Yeah, stay with me. yeah stay with me Look, today you're going to hear some forward-looking statements. look today you're going to hear some forward-looking statements That means we talking about where the company might be headed, projections, expectations, estimates, and all that future talk. that means we talking about where the company might be headed projections expectations estimates and all that future talk Let me keep it real with you. let me keep it real with you The future ain't set in stone. the future ain't set in stone Things can change. things can change Actually, results could come out looking real different, materially dif ferent from what's being discussed today. actually results could come out looking real different materially dif ferent from what's being discussed today If you really want to understand all the risk and what could shift that picture, go ahead and tap into the company's filings with the SEC. That's where it's all laid out. On top of that, you're going to be hearing some non-IFRS measures. I know that sound fancy, all that means is we sometimes look at the numbers in a way that helps tell the fuller story. If you want to see how that all lines up with the standard numbers, check the appendix in the presentation. It's all broken down for you right there. One more thing before I let you all ride. Nothing you hear today means there's any obligation to come back and update these forward-looking statements later on if things change. If you really want to understand all the risk and what could shift that picture, go ahead and tap into the company's filings with the SEC. if you really want to understand all the risk and what could shift that picture go ahead and tap into the company's filings with the sec That's where it's all laid out. that's where it's all laid out On top of that, you're going to be hearing some non-IFRS measures. on top of that you're going to be hearing some non-ifrs measures I know that sound fancy, all that means is we sometimes look at the numbers in a way that helps tell the fuller story. i know that sound fancy all that means is we sometimes look at the numbers in a way that helps tell the fuller story If you want to see how that all lines up with the standard numbers, check the appendix in the presentation. if you want to see how that all lines up with the standard numbers check the appendix in the presentation It's all broken down for you right there. it's all broken down for you right there One more thing before I let you all ride. one more thing before i let you all ride Nothing you hear today means there's any obligation to come back and update these forward-looking statements later on if things change. nothing you hear today means there's any obligation to come back and update these forward-looking statements later on if things change Today is today. That's how we rock it. All right? Just like that, you're safely harbored. Let's get into it. Over to the team. Over and out from the D-O-double G. Today is today. today is today That's how we rock it. that's how we rock it All right? all right Just like that, you're safely harbored. just like that you're safely harbored Let's get into it. let's get into it Over to the team. over to the team Over and out from the D-O-double G. over and out from the d-o-double g

Speaker 13: Please welcome to the stage Co-CEOs of Spotify, Alex Norström and Gustav Söderström. Please welcome to the stage Co-CEOs of Spotify, Alex Norström and Gustav Söderström. please welcome to the stage co-ceos of spotify alex norström and gustav söderström

Speaker 1: Good morning, everyone. I'm Alex. Good morning, everyone. good morning everyone I'm Alex. i'm alex

Speaker 6: I'm Gustav. I'm Gustav. i'm gustav

Speaker 1: Whether you've been following our journey since the beginning or taking a fresh look today, thank you for joining us. Today is our opportunity to share with you why we are so excited about value creation for Spotify. Spotify is in the business of delivering creativity and culture to the world, helping artists, creators, and authors connect with audiences and grow their careers. Gustav and I, we've been with Spotify since the early days. I got the haircut to show for it. I'm not sure if you're aware, but Spotify turns 20 this year, and this marks our third Investor Day. We've seen the company through so many chapters, and we can say with confidence that the opportunity ahead has never been greater. Let us tell you about where we are today. Whether you've been following our journey since the beginning or taking a fresh look today, thank you for joining us. whether you've been following our journey since the beginning or taking a fresh look today thank you for joining us Today is our opportunity to share with you why we are so excited about value creation for Spotify. today is our opportunity to share with you why we are so excited about value creation for spotify Spotify is in the business of delivering creativity and culture to the world, helping artists, creators, and authors connect with audiences and grow their careers. spotify is in the business of delivering creativity and culture to the world helping artists creators and authors connect with audiences and grow their careers Gustav and I, we've been with Spotify since the early days. gustav and i we've been with spotify since the early days I got the haircut to show for it. i got the haircut to show for it I'm not sure if you're aware, but Spotify turns 20 this year, and this marks our third Investor Day. i'm not sure if you're aware but spotify turns 20 this year and this marks our third investor day We've seen the company thro ugh so many chapters, and we can say with confidence that the opportunity ahead has never been greater. we've seen the company thro ugh so many chapters and we can say with confidence that the opportunity ahead has never been greater Let us tell you about where we are today. let us tell you about where we are today

Speaker 6: We're in 184 markets with 761 million active users, nearly 300 million are subscribers. This massive group of paying passionate fans is not only double the size of any other music service, but also much more engaged than any other music service. We're in 184 markets with 761 million active users, nearly 300 million are subscribers. we're in 184 markets with 761 million active users nearly 300 million are subscribers This massive group of paying passionate fans is not only double the size of any other music service, but also much more engaged than any other music service. this massive group of paying passionate fans is not only double the size of any other music service but also much more engaged than any other music service

Speaker 1: That's why almost two-thirds of all premium music streams happen on Spotify. Far more than our subscriber base would suggest. That's why almost two-thirds of all premium music streams happen on Spotify. that's why almost two-thirds of all premium music streams happen on spotify Far more than our subscriber base would suggest. far more than our subscriber base would suggest

Speaker 6: The majority of these subscribers come back over 25 days a month, with over 100 million of them spending more than 28 days a month with us. That's 100 million people with almost 100% DAU over MAU. The majority of these subscribers come back over 25 days a month, with over 100 million of them spending more than 28 days a month with us. the majority of these subscribers come back over 25 days a month with over 100 million of them spending more than 28 days a month with us That's 100 million people with almost 100% DAU over MAU . that's 100 million people with almost 100% dau over mau

Speaker 1: That also means that 3.5% of the world subscribes to Spotify, giving us more than 96% of the world left to win over. That also means that 3.5% of the world subscribes to Spotify, giving us more than 96% of the world left to win over. that also means that 3.5% of the world subscribes to spotify giving us more than 96% of the world left to win over

Speaker 6: There have been more than 10 billion playlists created, and our global user base now generates 3.4 trillion taste signals every day across all of our verticals and surfaces, and that's up 43% since just the top of this year. There have been more than 10 billion playlists created, and our global user base now generates 3.4 trillion taste signals every day across all of our verticals and surfaces, and that's up 43% since just the top of this year. there have been more than 10 billion playlists created and our global user base now generates 3.4 trillion taste signals every day across all of our verticals and surfaces and that's up 43% since just the top of this year

Speaker 1: Spotify is also one of the world's largest music communities, with nearly 500 million people subscribing to someone else's playlist and over 45 million people enjoying collaborative playlists each month, and almost 50 million people listening together in real-time using Jam. Spotify is also one of the world's largest music communities, with nearly 500 million people subscribing to someone else's playlist and over 45 million people enjoying collaborative playlists each month, and almost 50 million people listening together in real-time using Jam. spotify is also one of the world's largest music communities with nearly 500 million people subscribing to someone else's playlist and over 45 million people enjoying collaborative playlists each month and almost 50 million people listening together in real-time using jam

Speaker 6: Spotify is also more than music today. Over 500 million people, half a billion people, stream the video podcast on Spotify, up nearly 50% year-over-year. Spotify is also more than music today. spotify is also more than music today Over 500 million people, half a billion people, stream the video podcast on Spotify, up nearly 50% year-over-year. over 500 million people half a billion people stream the video podcast on spotify up nearly 50% year-over-year

Speaker 1: In just a couple of years, we've already captured roughly 20% of the audiobooks market in the U.S. As of today, you all are going to hear much more from our members of our team about where we've been and where we're going. As most of you know, Spotify was born during the piracy era, when the music industry was in free fall. From day 1, we set out to solve problems that others thought were unsolvable. This mindset has defined everything since. Before we look ahead, Gustav, why don't you take us back a bit? In just a couple of years, we've already captured roughly 20% of the audiobooks market in the U.S. in just a couple of years we've already captured roughly 20% of the audiobooks market in the u.s As of today, you all are going to hear much more from our members of our team about where we've been and where we're going. as of today you all are going to hear much more from our members of our team about where we've been and where we're going As most of you know, Spotify was born during the piracy era, when the music ind ustry was in free fall. as most of you know spotify was born during the piracy era when the music ind ustry was in free fall From day 1, we set out to solve problems that others thought were unsolvable. from day 1 we set out to solve problems that others thought were unsolvable This mindset has defined everything since. this mindset has defined everything since Before we look ahead, Gustav, why don't you take us back a bit? before we look ahead gustav why don't you take us back a bit

Speaker 6: Let's do it. Let's go back to 2018, our first Investor Day. The big question that many of you were asking yourselves then was, "Okay, Spotify was right about access versus downloads, but in a world of competitors with walled gardens and massive distribution advantages, how can you possibly win?" Our answer was counter-positioning, built on three ideas. First was Premium. We focused on maximizing reach while lowering the barrier to entry and building engagement. Second was ubiquity. Rather than sort of building a walled garden of our own, we chose to be everywhere, across devices and ecosystems. Third was personalization. We invested early in machine learning as the core driver of retention. That's pretty obvious, maybe, in the age of AI, but it was not obvious back in 2013 when we started. Let's do it. let's do it Let's go back to 2018, our first Investor Day. let's go back to 2018 our first investor day The big question that many of you were asking yourselves then was, "Okay, Spotify was right about access versus downloads, but in a world of competitors with walled gardens and massive distribution advantages, how can you possibly win?" Our answer was counter-positioning, built on three ideas. the big question that many of you were asking yourselves then was "okay spotify was right about access versus downloads but in a world of competitors with walled gardens and massive distribution advantages how can you possibly win?" our answer was counter-positioning built on three ideas First was Premium. first was premium We focused on maximizing reach while lowering the barrier to entry and building engagement. we focused on maximizing reach while lowering the barrier to entry and building engagement Second was ubiquity. second was ubiquity Rather than sort of building a walled garden of our own, we chose to be everywhere, across devices and ecosystems. rather than sort of building a walled garden of our own we chose to be everywhere across devices and ecosystems Third was personalization. third was personalization We invested early in machine learning as the core driver of retention. we invested early in machine learning as the core driver of retention That's pretty obvious, maybe, in the age of AI, but it was not obvious back in 2013 when we started. that's pretty obvious maybe in the age of ai but it was not obvious back in 2013 when we started

Speaker 1: It wasn't. It wasn't. it wasn't

Speaker 6: Of course, investors also wanted to understand how do you win in a category where everyone licenses the same catalog? Our solution was that we would use the freemium tier to build global scale, then we would win by out-innovating on the product itself. We didn't just rely on one or two differentiated features. We built a platform that continuously turns user behavior into new product experiences and ways to create value. Spotify became the R&D department of the music industry, where new offerings are tested at scale, adopted across the ecosystems. When we met again for our next Investor Day in 2022, four years later, we had delivered on that strategy and quite a bit more, actually. Of course, investors also wanted to understand how do you win in a category where everyone licenses the same catalog? of course investors also wanted to understand how do you win in a category where everyone licenses the same catalog Our solution was that we would use the freemium tier to build global scale, then we would win by out-innovating on the product itself. our solution was that we would use the freemium tier to build global scale then we would win by out-innovating on the product itself We didn't just rely on one or two differentiated features. we didn't just rely on one or two differentiated features We built a platform that continuously turns user behavior into new product experiences and ways to create value. we built a platform that continuously turns user behavior into new product experiences and ways to create value Spotify became the R&D department of the music industry, where new offerings are tested at scale, adopted across the ecosystems. spotify became the r&d department of the music industry where new offerings are tested at scale adopted across the ecosystems When we met again for our next Investor Day in 2022, four years later, we had delivered on that strategy and quite a bit more, actually. when we met again for our next investor day in 2022 four years later we had delivered on that strategy and quite a bit more actually The new question was, okay, Spotify is now a great product, but will it ever truly be a great business with solid margins? Even more, can you ever actually go beyond music? Our answer to this question was the Spotify machine. The idea was pretty simple. It was to take all the capabilities that we had built for music and then extend them into new verticals, creating new business models, combining music, podcasts, and audiobooks into a single unified experience. The new question was, okay, Spotify is now a great product, but will it ever truly be a great business with solid margins? the new question was okay spotify is now a great product but will it ever truly be a great business with solid margins Even more, can you ever actually go beyond music? even more can you ever actually go beyond music Our answer to this question was the Spotify machine. our answer to this question was the spotify machine The idea was pretty simple. the idea was pretty simple It was to take all the capabilities that we had built for music and then extend them into new verticals, creating new business models, combining music, podcasts, and audiobooks into a single unified experience. it was to take all the capabilities that we had built for music and then extend them into new verticals creating new business models combining music podcasts and audiobooks into a single unified experience

Speaker 1: All right. Let's take a look at what we have delivered since 2022. Let's start with users. We've added nearly 340 million people to the platform. The pace of this progress puts us well on the path to 1 billion users. We grew our subscriber base by over 110 million to reach 293 million subs. This makes Spotify one of the largest subscription businesses in the world. In revenue, we had a currency-neutral CAGR of 18%, reaching EUR 17 billion in 2025. That almost reaches the long-term target we set. We achieved a 32% gross margin in 2025, up from 25% in 2022, beating our 30% goal. We shifted operating margin over 18 percentage points from around negative 6% to a positive of almost 13% in 2025. Importantly, this has flowed through to cash. All right. all right Let's take a look at what we have delivered since 2022. let's take a look at what we have delivered since 2022 Let's start with users. let's start with users We've added nearly 340 million people to the platform. we've added nearly 340 million people to the platform The pace of this progress puts us well on the path to 1 billion users. the pace of this progress puts us well on the path to 1 billion users We grew our subscriber base by over 110 million to reach 293 million subs. we grew our subscriber base by over 110 million to reach 293 million subs This makes Spotify one of the largest subscription businesses in the world. this makes spotify one of the largest subscription businesses in the world In revenue, we had a currency-neutral CAGR of 18%, reaching EUR 17 billion in 2025. in revenue we had a currency-neutral cagr of 18% reaching eur 17 billion in 2025 That almost reaches the long-term target we set. that almost reaches the long-term target we set We achieved a 32% gross margin in 2025, up from 25% in 2022, beating our 30% goal. we achieved a 32% gross margin in 2025 up from 25% in 2022 beating our 30% goal We shifted operating margin over 18 percentage points from around negative 6% to a positive of almost 13% in 2025. we shifted operating margin over 18 percentage points from around negative 6% to a positive of almost 13% in 2025 Importantly, this has flowed through to cash. importantly this has flowed through to cash Free cash flow went from close to zero in 2022 to nearly EUR 3 billion in 2025. We've got a scaled, profitable business with a large and growing audience and multiple engines of growth. The Spotify you see today is very different from the one you saw four years ago. How did we achieve this while continuing to grow users, subscribers, and revenue at high rate? Well, first, we renewed our contracts with the rights holders in the music industry. We did this twice to make our music business model much more sustainable. Second, we grew our marketplace business at a much higher velocity, which contributed to improving our gross margin. Third, we reimagined our ads and podcasting businesses. While these were pretty hard pivots, they're putting us in a much better position long-term. Free cash flow went from close to zero in 2022 to nearly EUR 3 billion in 2025. free cash flow went from close to zero in 2022 to nearly eur 3 billion in 2025 We've got a scaled, profitable business with a large and growing audience and multiple engines of growth. we've got a scaled profitable business with a large and growing audience and multiple engines of growth The Spotify you see today is very different from the one you saw four years ago. the spotify you see today is very different from the one you saw four years ago How did we achieve this while continuing to grow users, subscribers, and revenue at high rate? how did we achieve this while continuing to grow users subscribers and revenue at high rate Well, first, we renewed our contracts with the rights holders in the music industry. well first we renewed our contracts with the rights holders in the music industry We did this twice to make our music business model much more sustainable. we did this twice to make our music business model much more sustainable Second, we grew our marketplace business at a much higher velocity, which contributed to improving our gross margin. second we grew our marketplace business at a much higher velocity which contributed to improving our gross margin Third, we reimagined our ads and podcasting businesses. third we reimagined our ads and podcasting businesses While these were pretty hard pivots, they're putting us in a much better position long-term. while these were pretty hard pivots they're putting us in a much better position long-term We licensed one of the most compelling catalogs of audiobooks and added it to Spotify Premium in over 20 markets. Next, we launched global improvements to Spotify Free, making it even more competitive as a growth driver. Finally, we redesigned and reduced our org size to match our roadmaps, which resulted in operating leverage. There are countless other wins we're not covering here. The progress is evident. We licensed one of the most compelling catalogs of audiobooks and added it to Spotify Premium in over 20 markets. we licensed one of the most compelling catalogs of audiobooks and added it to spotify premium in over 20 markets Next, we launched global improvements to Spotify Free, making it even more competitive as a growth driver. next we launched global improvements to spotify free making it even more competitive as a growth driver Finally, we redesigned and reduced our org size to match our roadmaps, which resulted in operating leverage. finally we redesigned and reduced our org size to match our roadmaps which resulted in operating leverage There are countless other wins we're not covering here. there are countless other wins we're not covering here The progress is evident. the progress is evident

Speaker 6: I love those audiobooks. All right, let's jump into what you're asking now in 2026. We think the first question you have on your minds is, okay, you're a real business now. Is this it? Is it mostly just incremental growth from here on? Our answer, absolutely not. You will hear much more throughout the day, but here are two key takeaways that I want to take with you. Spotify is not a single-product company, and our next chapter is not just about scaling the verticals that we already have. Sure, it's about continuing to improve our current monetization, but also about opening up new ways to monetize. Second, Spotify's opportunity to grow goes well beyond just pricing. There is actually no such thing as an average user, which you will hear more about today. I love those audiobooks. i love those audiobooks All right, let's jump into what you're asking now in 2026. all right let's jump into what you're asking now in 2026 We think the first question you have on your minds is, okay, you're a real business now. we think the first question you have on your minds is okay you're a real business now Is this it? is this it Is it mostly just incremental growth from here on? is it mostly just incremental growth from here on Our answer, absolutely not. our answer absolutely not You will hear much more throughout the day, but here are two key takeaways that I want to take with you. you will hear much more throughout the day but here are two key takeaways that i want to take with you Spotify is not a single-product company, and our next chapter is not just about scaling the verticals that we already have. spotify is not a single-product company and our next chapter is not just about scaling the verticals that we already have Sure, it's about continuing to improve our current monetization, but also about opening up new ways to monetize. sure it's about continuing to improve our current monetization but also about opening up new ways to monetize Second, Spotify's opportunity to grow goes well beyond just pricing. second spotify's opportunity to grow goes well beyond just pricing There is actually no such thing as an average user, which you will hear more about today. there is actually no such thing as an average user which you will hear more about today Engagement and willingness to pay follow a power law, and we see clear opportunities to capture more value from our most engaged users. The second question that I'm guessing a lot of you are asking is, what does AI mean for Spotify? Is it a tailwind or is it actually a headwind? Guess what? It's a tailwind. Our view on AI is both pretty straightforward, but also somewhat contrarian to what some in the Valley may tell you. We do not believe that the advantage for us comes from owning our own general reasoning frontier model, what is called an LLM. Instead, we believe that general domain reasoning, like maybe coding, math, will stay widely available, especially given the massive investment and intense competition that you are seeing between the hyperscalers right now. Engagement and willingness to pay follow a power law, and we see clear opportunities to capture more value from our most engaged users. engagement and willingness to pay follow a power law and we see clear opportunities to capture more value from our most engaged users The second question that I'm guessing a lot of you are asking is, what does AI mean for Spotify? the second question that i'm guessing a lot of you are asking is what does ai mean for spotify Is it a tailwind or is it actually a headwind? is it a tailwind or is it actually a headwind Guess what? guess what It's a tailwind. it's a tailwind Our view on AI is both pretty straightforward, but also somewhat contrarian to what some in the Valley may tell you. our view on ai is both pretty straightforward but also somewhat contrarian to what some in the valley may tell you We do not believe that the advantage for us comes from owning our own general reasoning frontier model, what is called an LLM. we do not believe that the advantage for us comes from owning our own general reasoning frontier model what is called an llm Instead, we believe that general domain reasoning, like maybe coding, math, will stay widely available, especially given the massive investment and intense competition that you are seeing between the hyperscalers right now. instead we believe that general domain reasoning like maybe coding math will stay widely available especially given the massive investment and intense competition that you are seeing between the hyperscalers right now Instead, our bet is that buying this capability on the open market will continue to be the most cost-efficient strategy. The advantage from us is that it comes from applying general intelligence to something that is proprietary, dynamic, and deeply personal. It essentially comes down to the unique data and context that only Spotify has about users. What is often called taste. Taste is continuously refreshed, it's grounded in real behavior, and very hard to replicate. Rather than training general large language models, we are training what we call our Large Taste Model. We have also referred to this as our large personalization model in the past. You know it's the same thing. This strategy lets us retain significant advantages and still benefit instantly from any frontier advances, and the very aggressive price-performance-cost curve that we're seeing there. Instead, our bet is that buying this capability on the open market will continue to be the most cost-efficient strategy. The advantage from us is that it comes from applying general intelligence to something that is proprietary, dynamic, and deeply personal. instead our bet is that buying this capability on the open market will continue to be the most cost-efficient strategy. the advantage from us is that it comes from applying general intelligence to something that is proprietary dynamic and deeply personal It essentially comes down to the unique data and context that only Spotify has about users. it essentially comes down to the unique data and context that only spotify has about users What is often called taste. what is often called taste Taste is continuously refreshed, it's grounded in real behavior, and very hard to replicate. taste is continuously refreshed it's grounded in real behavior and very hard to replicate Rather than training general large language models, we are training what we call our Large Taste Model. rather than training general large language models we are training what we call our large taste model We have also referred to this as our large personalization model in the past. we have also referred to this as our large personalization model in the past You know it's the same thing. you know it's the same thing This strategy lets us retain significant advantages and still benefit instantly from any frontier advances, and the very aggressive price-performance-cost curve that we're seeing there. this strategy lets us retain significant advantages and still benefit instantly from any frontier advances and the very aggressive price-performance-cost curve that we're seeing there We will cover this in much more detail today. We will cover this in much more detail today. we will cover this in much more detail today

Speaker 1: At Spotify, we don't capture people's attention with empty calories. We do it by delivering an experience that people truly value, and they stay because the product earns its place in their day, every day. After nearly two decades, we understand that growth is driven by engagement and retention. Today, most platforms compete for time on app, whether it's minutes per day or hours per session. Spotify performs well on that dimension. From 2021 to 2025, streaming hours per subscriber increased globally by 10%. We've never believed that all time is created equal. This is where Spotify breaks from much of the consumer internet. We are not trying to spark a binge. We are trying to become a trusted companion across more moments in people's lives. At Spotify, we don't capture people's attention with empty calories. at spotify we don't capture people's attention with empty calories We do it by delivering an experience that people truly value, and they stay because the product earns its place in their day, every day. we do it by delivering an experience that people truly value and they stay because the product earns its place in their day every day After nearly two decades, we understand that growth is driven by engagement and retention. after nearly two decades we understand that growth is driven by engagement and retention Today, most platforms compete for time on app, whether it's minutes per day or hours per session. today most platforms compete for time on app whether it's minutes per day or hours per session Spotify performs well on that dimension. spotify performs well on that dimension From 2021 to 2025, streaming hours per subscriber increased globally by 10%. from 2021 to 2025 streaming hours per subscriber increased globally by 10% We've never believed that all time is created equal. we've never believed that all time is created equal This is where Spotify breaks from much of the consumer internet. this is where spotify breaks from much of the consumer internet We are not trying to spark a binge. we are not trying to spark a binge We are trying to become a trusted companion across more moments in people's lives. we are trying to become a trusted companion across more moments in people's lives We measure value not only by how long people listen, but how often they choose to return. Days in a month, not just minutes in a session. That distinction matters. Spotify fits into the morning commute, the study session, the workout, the dinner prep, the evening wind down, and the story before bed. Importantly, a growing number of those moments are spent with Spotify around the world, and people listen across every device. Their iPhone, Garmin watch, Tesla, Roku, and PS5, just to name a few. In fact, the number of times that you come back to us in a month and the number of devices you use might be among the most important metrics that we monitor. This is how we think about engagement on Spotify. We measure value not only by how long people listen, but how often they choose to return. we measure value not only by how long people listen but how often they choose to return Days in a month, not just minutes in a session. days in a month not just minutes in a session That distinction matters. that distinction matters Spotify fits into the morning commute, the study session, the workout, the dinner prep, the evening wind down, and the story before bed. spotify fits into the morning commute the study session the workout the dinner prep the evening wind down and the story before bed Importantly, a growing number of those moments are spent with Spotify around the world, and people listen across every device. importantly a growing number of those moments are spent with spotify around the world and people listen across every device Their iPhone, Garmin watch, Tesla, Roku, and PS5, just to name a few. their iphone garmin watch tesla roku and ps5 just to name a few In fact, the number of times that you come back to us in a month and the number of devices you use might be among the most important metrics that we monitor. in fact the number of times that you come back to us in a month and the number of devices you use might be among the most important metrics that we monitor This is how we think about engagement on Spotify. this is how we think about engagement on spotify Now, the other key unlock to our effectiveness is our verticals. Music came first and remains the core of Spotify. Layering podcasts on top adds more days of engagement. Most recently, we've introduced hundreds of millions of people to audiobooks, and the result has created our most active and well-retained group of all. Those who use all three verticals, music, podcast, and audiobooks, are engaging with Spotify almost every day of the month. Now, the other key unlock to our effectiveness is our verticals. now the other key unlock to our effectiveness is our verticals Music came first and remains the core of Spotify. music came first and remains the core of spotify Layering podcasts on top adds more days of engagement. layering podcasts on top adds more days of engagement Most recently, we've introduced hundreds of millions of people to audiobooks, and the result has created our most active and well-retained group of all. most recently we've introduced hundreds of millions of people to audiobooks and the result has created our most active and well-retained group of all Those who use all three verticals, music, podcast, and audiobooks, are engaging with Spotify almost every day of the month. those who use all three verticals music podcast and audiobooks are engaging with spotify almost every day of the month

Speaker 6: It's pretty crazy. It's pretty crazy. it's pretty crazy

Speaker 1: It's pretty remarkable. Now we have improved all three dimensions, use cases, devices and verticals. We've done so consistently over the last five years. This is exactly the type of engagement and retention that drives the growth of Spotify. We're not stopping there. We recently introduced fitness, which we believe has the potential to become a meaningful vertical in its own right. We have our eye on several more. Even our pricing is a retention story. We've raised prices multiple times now with minimal churn. Because users, they see the value and stick around. What you'll see today builds on that trajectory, continuing the Spotify growth story. What does this all mean for our goals through 2030? It's pretty remarkable. it's pretty remarkable Now we have improved all three dimensions, use cases, devices and verticals. now we have improved all three dimensions use cases devices and verticals We've done so consistently over the last five years. we've done so consistently over the last five years This is exactly the type of engagement and retention that drives the growth of Spotify. this is exactly the type of engagement and retention that drives the growth of spotify We're not stopping there. we're not stopping there We recently introduced fitness, which we believe has the potential to become a meaningful vertical in its own right. we recently introduced fitness which we believe has the potential to become a meaningful vertical in its own right We have our eye on several more. we have our eye on several more Even our pricing is a retention story. even our pricing is a retention story We've raised prices multiple times now with minimal churn. we've raised prices multiple times now with minimal churn Because users, they see the value and stick around. because users they see the value and stick around What you'll see today builds on that trajectory, continuing the Spotify growth story. what you'll see today builds on that trajectory continuing the spotify growth story What does this all mean for our goals through 2030? what does this all mean for our goals through 2030

Speaker 6: What does it mean? What does it mean? what does it mean

Speaker 1: What does it mean? Well, here's what we expect to deliver. A mid-teens revenue CAGR, a gross margin of 35%-40%, an operating margin above 20%, and strong growth in free cash flow. We also remain committed to our North Stars, 1 billion subscribers, $100 billion in revenue, and over 40% in gross margin. Let me give you more insight into our approach to capital allocation. We will keep a strong balance sheet. This provides us with the flexibility to execute and reinvest in our strategy. We will also continue to explore inorganic investments, like we always have, that will strengthen our existing businesses and accelerate our strategy. We will keep countering dilution from stock-based compensation through share repurchases. We will also continue to see strong cash flow generation. What does it mean? what does it mean Well, here's what we expect to deliver. well here's what we expect to deliver A mid-teens revenue CAGR, a gross margin of 35%-40%, an operating margin above 20%, and strong growth in free cash flow. a mid-teens revenue cagr a gross margin of 35%-40% an operating margin above 20% and strong growth in free cash flow We also remain committed to our North Stars, 1 billion subscribers, $100 billion in revenue, and over 40% in gross margin. we also remain committed to our north stars 1 billion subscribers $100 billion in revenue and over 40% in gross margin Let me give you more insight into our approach to capital allocation. let me give you more insight into our approach to capital allocation We will keep a strong balance sheet. we will keep a strong balance sheet This provides us with the flexibility to execute and reinvest in our strategy. this provides us with the flexibility to execute and reinvest in our strategy We will also continue to explore inorganic investments, like we always have, that will strengthen our existing businesses and accelerate our strategy. we will also continue to explore inorganic investments like we always have that will strengthen our existing businesses and accelerate our strategy We will keep countering dilution from stock-based compensation through share repurchases. we will keep countering dilution from stock-based compensation through share repurchases We will also continue to see strong cash flow generation. we will also continue to see strong cash flow generation Even with these efforts, we plan to start returning excess capital to our shareholders. Christian will elaborate more on these plans. We think this is an exciting outlook. Even with these efforts, we plan to start returning excess capital to our shareholders. even with these efforts we plan to start returning excess capital to our shareholders Christian will elaborate more on these plans. christian will elaborate more on these plans We think this is an exciting outlook. we think this is an exciting outlook

Speaker 6: Very exciting. Very exciting. very exciting

Speaker 1: Now I want to take you into how we plan to achieve these goals. We're betting on four big ideas. The first is that the world operates as a power law. For Spotify, that opens up significant monetization. Let me unpack what that means. In the industry, we often talk about averages, like Gustav said. There is no such thing as an average user. It's just a way to represent very different underlying usage and willingness to pay. This is our demand curve. So far, Spotify has focused on capturing two sections of that curve. With our scale-free tier, we capture and monetize the very long tail of people using Spotify, supported by ads. And this is what gives us a massive universal TAM. Next, our pay tiers. You meet the demand with a range of options. Now I want to take you into how we plan to achieve these goals. now i want to take you into how we plan to achieve these goals We're betting on four big ideas. we're betting on four big ideas The first is that the world operates as a power law. the first is that the world operates as a power law For Spotify, that opens up significant monetization. for spotify that opens up significant monetization Let me unpack what that means. let me unpack what that means In the industry, we often talk about averages, like Gustav said. in the industry we often talk about averages like gustav said There is no such thing as an average user. there is no such thing as an average user It's just a way to represent very different underlying usage and willingness to pay. it's just a way to represent very different underlying usage and willingness to pay This is our demand curve. this is our demand curve So far, Spotify has focused on capturing two sections of that curve. so far spotify has focused on capturing two sections of that curve With our scale-free tier, we capture and monetize the very long tail of people using Spotify, supported by ads. And this is what gives us a massive universal TAM. with our scale-free tier we capture and monetize the very long tail of people using spotify supported by ads. and this is what gives us a massive universal tam Next, our pay tiers. next our pay tiers You meet the demand with a range of options. you meet the demand with a range of options For example, the EUR 6.99 Student plan and the EUR 12.99 individual Premium plan. That means today we have almost 300 million people on what is one of the world's largest subscription platforms. We have expanded this Premium segment both up and down by making more plans more affordable with Family, Student, Duo, and others. Also by raising price, as we've added more features and offerings into Premium, again, with minimal churn. There are lots of people in Premium who are prepared to spend even more based on their incredible usage. Now, for some time, we have been talking about add-ons that would let us capture the full head of that curve. Now, we all thought that music was going to be first out the gate. For example, the EUR 6.99 Student plan and the EUR 12.99 individual Premium plan. for example the eur 6.99 student plan and the eur 12.99 individual premium plan That means today we have almost 300 million people on what is one of the world's largest subscription platforms. that means today we have almost 300 million people on what is one of the world's largest subscription platforms We have expanded this Premium segment both up and down by making more plans more affordable with Family, Student, Duo, and others. we have expanded this premium segment both up and down by making more plans more affordable with family student duo and others Also by raising price, as we've added more features and offerings into Premium, again, with minimal churn. also by raising price as we've added more features and offerings into premium again with minimal churn There are lots of people in Premium who are prepared to spend even more based on their incredible usage. there are lots of people in premium who are prepared to spend even more based on their incredible usage Now, for some time, we have been talking about add-ons that would let us capture the full head of that curve. now for some time we have been talking about add-ons that would let us capture the full head of that curve Now, we all thought that music was going to be first out the gate. now we all thought that music was going to be first out the gate

Speaker 6: I certainly did. I certainly did. i certainly did

Speaker 1: It turns out that it was our newest vertical, Audiobooks, that got there first. Let me tell you about Audiobooks+. As Audiobooks and Premium rolled out across our first 22 markets, we saw listening grow significantly. What stood out was a group of highly engaged users consistently hitting their monthly usage limits. That was a clear signal of unmet demand. We introduced Audiobooks+, allowing those users to extend their listening by purchasing an add-on for additional hours. The response has been strong. In less than a year, more than 1 million users are already paying for Audiobooks+ on top of their Spotify subscription. Even more importantly, these are very valuable users. These users, these subscribers, have lifetime values that are multiples of Premium-only users. They spend far more, and they stay much longer. It turns out that it was our newest vertical, Audiobooks, that got there first. it turns out that it was our newest vertical audiobooks that got there first Let me tell you about Audiobooks+. let me tell you about audiobooks+ As Audiobooks and Premium rolled out across our first 22 markets, we saw listening grow significantly. as audiobooks and premium rolled out across our first 22 markets we saw listening grow significantly What stood out was a group of highly engaged users consistently hitting their monthly usage limits. what stood out was a group of highly engaged users consistently hitting their monthly usage limits That was a clear signal of unmet demand. that was a clear signal of unmet demand We introduced Audiobooks+, allowing those users to extend their listening by purchasing an add-on for additional hours. we introduced audiobooks+ allowing those users to extend their listening by purchasing an add-on for additional hours The response has been strong. the response has been strong In less than a year, more than 1 million users are already paying for Audiobooks+ on top of their Spotify subscription. in less than a year more than 1 million users are already paying for audiobooks+ on top of their spotify subscription Even more importantly, these are very valuable users. even more importantly these are very valuable users These users, these subscribers, have lifetime values that are multiples of Premium-only users. these users these subscribers have lifetime values that are multiples of premium-only users They spend far more, and they stay much longer. they spend far more and they stay much longer We see this power law of usage across all of our verticals, creating significant potential. In many industries, this type of demand curve typically gets divided between different players. We see this power law of usage across all of our verticals, creating significant potential. we see this power law of usage across all of our verticals creating significant potential In many industries, this type of demand curve typically gets divided between different players. in many industries this type of demand curve typically gets divided between different players

Speaker 6: Exactly. Exactly. exactly

Speaker 1: We are one of the few companies in the world that has the business models and the skills needed to cover the entire demand curve. From the outside, Spotify has always looked like a simple 2-step funnel, Free and Premium, large in size with a massive TAM, but ultimately a capped ARPU. What we're outlining today is actually a platform for a diverse set of higher ARPU products, each with a smaller individual TAM, but much higher ARPUs. Thanks to our scale, this represents many millions of users and a tremendous upside. This is just the beginning of our next monetization chapter. Today, Charlie will show that music fans will be able to interact with their music in entirely new ways. Something that we know that you've all been waiting for. We are one of the few companies in the world that has the business models and the skills needed to cover the entire demand curve. we are one of the few companies in the world that has the business models and the skills needed to cover the entire demand curve From the outside, Spotify has always looked like a simple 2-step funnel, Free and Premium, large in size with a massive TAM, but ultimately a capped ARPU. from the outside spotify has always looked like a simple 2-step funnel free and premium large in size with a massive tam but ultimately a capped arpu What we're outlining today is actually a platform for a diverse set of higher ARPU products, each with a smaller individual TAM, but much higher ARPUs. what we're outlining today is actually a platform for a diverse set of higher arpu products each with a smaller individual tam but much higher arpus Thanks to our scale, this represents many millions of users and a tremendous upside. thanks to our scale this represents many millions of users and a tremendous upside This is just the beginning of our next monetization chapter. this is just the beginning of our next monetization chapter Today, Charlie will show that music fans will be able to interact with their music in entirely new ways. today charlie will show that music fans will be able to interact with their music in entirely new ways Something that we know that you've all been waiting for. something that we know that you've all been waiting for

Speaker 6: Maybe. Maybe. maybe

Speaker 1: Yeah. As Roman and Maya will explain, we will also allow users to create truly personal podcasts for the first time, in addition to unlocking creator membership add-ons. Finally, Owen will talk to us about what is next for Audiobooks, which I won't spoil, but it turns out that even Audiobooks+ didn't satisfy the full demand curve of our user base. Book lovers are asking for Audiobooks++ and +++ and so on. Yeah. yeah As Roman and Maya will explain, we will also allow users to create truly personal podcasts for the first time, in addition to unlocking creator membership add-ons. as roman and maya will explain we will also allow users to create truly personal podcasts for the first time in addition to unlocking creator membership add-ons Finally, Owen will talk to us about what is next for Audiobooks, which I won't spoil, but it turns out that even Audiobooks+ didn't satisfy the full demand curve of our user base. finally owen will talk to us about what is next for audiobooks which i won't spoil but it turns out that even audiobooks+ didn't satisfy the full demand curve of our user base Book lovers are asking for Audiobooks++ and +++ and so on. book lovers are asking for audiobooks++ and +++ and so on

Speaker 6: You totally spoiled it now, by the way. You totally spoiled it now, by the way. you totally spoiled it now by the way

Speaker 1: I did. Across all of these use cases, the opportunity is consistent. We will give our most engaged users the ability to pay for more so that they can use more, control more, and access more. I did. i did Across all of these use cases, the opportunity is consistent. across all of these use cases the opportunity is consistent We will give our most engaged users the ability to pay for more so that they can use more, control more, and access more. we will give our most engaged users the ability to pay for more so that they can use more control more and access more

Speaker 6: This brings us to the second big idea that we're doubling down on. Spotify is moving from single player and passive to multiplayer and interactive. When our users adopt new behaviors, even before the product fully supports them, we pay attention. That signal is actually one of our most valuable advantages. We see what people do, what they choose, what they share, and even what they say in natural language these days to us. This brings us to the second big idea that we're doubling down on. this brings us to the second big idea that we're doubling down on Spotify is moving from single player and passive to multiplayer and interactive. spotify is moving from single player and passive to multiplayer and interactive When our users adopt new behaviors, even before the product fully supports them, we pay attention. when our users adopt new behaviors even before the product fully supports them we pay attention That signal is actually one of our most valuable advantages. that signal is actually one of our most valuable advantages We see what people do, what they choose, what they share, and even what they say in natural language these days to us. we see what people do what they choose what they share and even what they say in natural language these days to us

Speaker 1: That's right. That's right. that's right

Speaker 6: Years ago, we saw something interesting in how our playlists were used. One person would start a playlist, then their friends would text back and forth to add songs, and then the original creator could share it with the group. At the time, Spotify wasn't designed for collaboration, but the signal was very clear. People didn't just want to listen, they wanted to listen together. We added on-platform messaging and created the shareable playlist. Now it's obviously everywhere, with more than half a billion people subscribing to someone else's playlist. Then we went all in on these network effects, introducing Jam, a way for users to listen with their friends and maybe family in real time. With nearly 50 million people jamming together, we are seeing even more engaged users. Years ago, we saw something interesting in how our playlists were used. years ago we saw something interesting in how our playlists were used One person would start a playlist, then their friends would text back and forth to add songs, and then the original creator could share it with the group. one person would start a playlist then their friends would text back and forth to add songs and then the original creator could share it with the group At the time, Spotify wasn't designed for collaboration, but the signal was very clear. at the time spotify wasn't designed for collaboration but the signal was very clear People didn't just want to listen, they wanted to listen together. people didn't just want to listen they wanted to listen together We added on-platform messaging and created the shareable playlist. we added on-platform messaging and created the shareable playlist Now it's obviously everywhere, with more than half a billion people subscribing to someone else's playlist. now it's obviously everywhere with more than half a billion people subscribing to someone else's playlist Then we went all in on these network effects, introducing Jam, a way for users to listen with their friends and maybe family in real time. then we went all in on these network effects introducing jam a way for users to listen with their friends and maybe family in real time With nearly 50 million people jamming together, we are seeing even more engaged users. with nearly 50 million people jamming together we are seeing even more engaged users Now, the collaborative playlist is also another popular Spotify invention, which turned playlisting into something that groups build, share, and actually revisit. With almost another 50 million people streaming from a collaborative playlist, we've made music something that you just do together. All of this results in a pretty simple fact. You simply need to be on Spotify, end of story. Our experience is not about amassing followers or meeting strangers. It's about your real life connections and hanging out with your people. The next big idea, surprise surprise, centers on AI. The world is moving towards generation, where our users are in control. Our goal is to give them exactly that. Spotify launched in the era of curation, where the world's music was organized by our passionate users into tens of billions of playlists. Now, the collaborative playlist is also another popular Spotify invention, which turned playlisting into something that groups build, share, and actually revisit. now the collaborative playlist is also another popular spotify invention which turned playlisting into something that groups build share and actually revisit With almost another 50 million people streaming from a collaborative playlist, we've made music something that you just do together. with almost another 50 million people streaming from a collaborative playlist we've made music something that you just do together All of this results in a pretty simple fact. all of this results in a pretty simple fact You simply need to be on Spotify, end of story. you simply need to be on spotify end of story Our experience is not about amassing followers or meeting strangers. our experience is not about amassing followers or meeting strangers It's about your real life connections and hanging out with your people. it's about your real life connections and hanging out with your people The next big idea, surprise surprise, centers on AI. the next big idea surprise surprise centers on ai The world is moving towards generation, where our users are in control. the world is moving towards generation where our users are in control Our goal is to give them exactly that. Spotify launched in the era of curation, where the world's music was organized by our passionate users into tens of billions of playlists. our goal is to give them exactly that. spotify launched in the era of curation where the world's music was organized by our passionate users into tens of billions of playlists Building one of the richest collections of human taste signals that was ever assembled, actually. Next came a recommendation, powered by algorithms and machine learning. We turned those billions of curation signals into features like Discover Weekly, maybe Release Radar, and personalized surfaces that made discovery effortless for hundreds of millions of people. Now, we're entering the era of generation, where the experience isn't just selected for you from a catalog, it's actually shaped by each of our users in real-time around their taste, context, and intent. For example, with generative AI, for the first time in history, it's now possible to create and consume truly personal media, individual media. A podcast that was made for you, an audience of you, or maybe at most, you and a friend. Building one of the richest collections of human taste signals that was ever assembled, actually. building one of the richest collections of human taste signals that was ever assembled actually Next came a recommendation, powered by algorithms and machine learning. next came a recommendation powered by algorithms and machine learning We turned those billions of curation signals into features like Discover Weekly, maybe Release Radar, and personalized surfaces that made discovery effortless for hundreds of millions of people. we turned those billions of curation signals into features like discover weekly maybe release radar and personalized surfaces that made discovery effortless for hundreds of millions of people Now, we're entering the era of generation, where the experience isn't just selected for you from a catalog, it's actually shaped by each of our users in real-time around their taste, context, and intent. now we're entering the era of generation where the experience isn't just selected for you from a catalog it's actually shaped by each of our users in real-time around their taste context and intent For example, with generative AI, for the first time in history, it's now possible to create and consume truly personal media, individual media. for example with generative ai for the first time in history it's now possible to create and consume truly personal media individual media A podcast that was made for you, an audience of you, or maybe at most, you and a friend. a podcast that was made for you an audience of you or maybe at most you and a friend When you ask Spotify to, I don't know, give me the news, we will deliver a daily brief built around your interests, your inbox, your calendar, even the presentation that you're going to have later today. This media obviously needs a trusted private space, not a public feed. We've built exactly that. We're already seeing people take advantage of this with tools like Save to Spotify, which we launched a couple of weeks ago, where you can use your agent of choice, like maybe Claude Code, OpenClaude, Codex, to create individualized content. Like a narrated travel plan for your trip to Barcelona, or maybe dive deeper into a subject like token economy, based on what you've shared with your agent, like notes, files, articles, and more. When you ask Spotify to, I don't know, give me the news, we will deliver a daily brief built around your interests, your inbox, your calendar, even the presentation that you're going to have later today. when you ask spotify to i don't know give me the news we will deliver a daily brief built around your interests your inbox your calendar even the presentation that you're going to have later today This media obviously needs a trusted private space, not a public feed. this media obviously needs a trusted private space not a public feed We've built exactly that. we've built exactly that We're already seeing people take advantage of this with tools like Save to Spotify, which we launched a couple of weeks ago, where you can use your agent of choice, like maybe Claude Code, OpenClaude, Codex, to create individualized content. we're already seeing people take advantage of this with tools like save to spotify which we launched a couple of weeks ago where you can use your agent of choice like maybe claude code openclaude codex to create individualized content Like a narrated travel plan for your trip to Barcelona, or maybe dive deeper into a subject like token economy, based on what you've shared with your agent, like notes, files, articles, and more. like a narrated travel plan for your trip to barcelona or maybe dive deeper into a subject like token economy based on what you've shared with your agent like notes files articles and more Today, there is no media player for both public and private content, or put differently, there is no media player for the generative age. We believe Spotify will become that. Another way to think about this generative era is that computers finally understand English. This puts infinite creativity and control back in the user's hands. So for example, Prompt a Playlist, where you can ask it to create a Playlist using your entire listening history, going up to 20 years back almost, or to create one around who won Best New Artist. A fan favorite, "Make me a playlist with main character energy and send it to me every Monday morning to get me pumped up and confident for the week." This is a real user example, not made up. Today, there is no media player for both public and private content, or put differently, there is no media player for the generative age. today there is no media player for both public and private content or put differently there is no media player for the generative age We believe Spotify will become that. we believe spotify will become that Another way to think about this generative era is that computers finally understand English. another way to think about this generative era is that computers finally understand english This puts infinite creativity and control back in the user's hands. this puts infinite creativity and control back in the user's hands So for example, Prompt a Playlist, where you can ask it to create a Playlist using your entire listening history, going up to 20 years back almost, or to create one around who won Best New Artist. so for example prompt a playlist where you can ask it to create a playlist using your entire listening history going up to 20 years back almost or to create one around who won best new artist A fan favorite, "Make me a playlist with main character energy and send it to me every Monday morning to get me pumped up and confident for the week." This is a real user example, not made up. a fan favorite "make me a playlist with main character energy and send it to me every monday morning to get me pumped up and confident for the week." this is a real user example not made up

Speaker 1: It's yours. It's yours. It's yours. it's yours it's It's yours. it's yours

Speaker 6: If you want to shape Spotify more broadly, Taste Profile lets you tell Spotify who you are and even who you want to be. No one else offers this level of control. Spotify truly becomes your media service. If you want to shape Spotify more broadly, Taste Profile lets you tell Spotify who you are and even who you want to be. if you want to shape spotify more broadly taste profile lets you tell spotify who you are and even who you want to be No one else offers this level of control. no one else offers this level of control Spotify truly becomes your media service. spotify truly becomes your media service

Speaker 1: That brings us to our fourth big idea, time well spent. The most precious commodity that we each possess is our time. Yet, across much of the internet, too many platforms treat time as something to be captured and not really respected. Feeds keep you endlessly scrolling, often leaving you feeling regretful and empty. We believe there's another path. We enable experiences that generate love and bring joy and inspiration and insights, so that the time that you spend with us doesn't deplete you, it energizes you. We actively measure not just time spent, but how much of the time users consider valuable versus regrettable. Spotify consistently ranks among the most valuable time that people spend online. In our surveys, users report feeling good almost 90% of the time that they spend on Spotify. That brings us to our fourth big idea, time well spent. that brings us to our fourth big idea time well spent The most precious commodity that we each possess is our time. the most precious commodity that we each possess is our time Yet, across much of the internet, too many platforms treat time as something to be captured and not really respected. yet across much of the internet too many platforms treat time as something to be captured and not really respected Feeds keep you endlessly scrolling, often leaving you feeling regretful and empty. feeds keep you endlessly scrolling often leaving you feeling regretful and empty We believe there's another path. we believe there's another path We enable experiences that generate love and bring joy and inspiration and insights, so that the time that you spend with us doesn't deplete you, it energizes you. we enable experiences that generate love and bring joy and inspiration and insights so that the time that you spend with us doesn't deplete you it energizes you We actively measure not just time spent, but how much of the time users consider valuable versus regrettable. we actively measure not just time spent but how much of the time users consider valuable versus regrettable Spotify consistently ranks among the most valuable time that people spend online. spotify consistently ranks among the most valuable time that people spend online In our surveys, users report feeling good almost 90% of the time that they spend on Spotify. in our surveys users report feeling good almost 90% of the time that they spend on spotify That stands in sharp contrast to broader industry patterns, where users, especially younger ones, report actually regretting up to 40% of the time that they spend on other platforms. That stands in sharp contrast to broader industry patterns, where users, especially younger ones, report actually regretting up to 40% of the time that they spend on other platforms. that stands in sharp contrast to broader industry patterns where users especially younger ones report actually regretting up to 40% of the time that they spend on other platforms

Speaker 6: Even more, in some cases. Even more, in some cases. even more in some cases

Speaker 1: Even more. In some cases, they regret up to close to 70% of their time. Even more. even more In some cases, they regret up to close to 70% of their time. in some cases they regret up to close to 70% of their time

Speaker 6: It's pretty crazy to me. It's pretty crazy to me. it's pretty crazy to me

Speaker 1: This is what makes Spotify different. We are not maximizing engagement at any cost. We're building for something more satisfying, and more importantly, durable. This is not just good for users, it's good for business too. It turns out that all time is not created equal, and people are willing to spend and pay for time that they value. With that, let me invite another Gustav. I'm living in a world of Gustavs. This one is Gustav Gyllenhammar, to show you how this all translates into subscriber growth around the world. This is what makes Spotify different. this is what makes spotify different We are not maximizing engagement at any cost. we are not maximizing engagement at any cost We're building for something more satisfying, and more importantly, durable. we're building for something more satisfying and more importantly durable This is not just good for users, it's good for business too. this is not just good for users it's good for business too It turns out that all time is not created equal, and people are willing to spend and pay for time that they value. it turns out that all time is not created equal and people are willing to spend and pay for time that they value With that, let me invite another Gustav. with that let me invite another gustav I'm living in a world of Gustavs. i'm living in a world of gustavs This one is Gustav Gyllenhammar, to show you how this all translates into subscriber growth around the world. this one is gustav gyllenhammar to show you how this all translates into subscriber growth around the world

Speaker 5: Thank you both. Hi everyone. Historically, we have framed our opportunity to the smartphone. Music is not tied to one device. It is universal. Hardware is expanding beyond the phone, and software is redefining what listening can be across every surface. Now, when we think about TAM, our ambition is total population, because everyone has a relationship with music. What I want to show you is how our freemium system plays out, free fueling paid, country by country, culture by culture, all around the world. We are very proud that over 3% of the world's population pays for Spotify on a monthly basis. The global average hides an even more important story. When you look market by market, you can see that we're already capturing a significantly higher portion of the potential audience. Thank you both. thank you both Hi everyone. hi everyone Historically, we have framed our opportunity to the smartphone. historically we have framed our opportunity to the smartphone Music is not tied to one device. music is not tied to one device It is universal. it is universal Hardware is expanding beyond the phone, and software is redefining what listening can be across every surface. hardware is expanding beyond the phone and software is redefining what listening can be across every surface Now, when we think about TAM, our ambition is total population, because everyone has a relationship with music. now when we think about tam our ambition is total population because everyone has a relationship with music What I want to show you is how our freemium system plays out, free fueling paid, country by country, culture by culture, all around the world. what i want to show you is how our freemium system plays out free fueling paid country by country culture by culture all around the world We are very proud that over 3% of the world's population pays for Spotify on a monthly basis. we are very proud that over 3% of the world's population pays for spotify on a monthly basis The global average hides an even more important story. the global average hides an even more important story When you look market by market, you can see that we're already capturing a significantly higher portion of the potential audience. when you look market by market you can see that we're already capturing a significantly higher portion of the potential audience In Sweden, our most established market, paid penetration is approaching 50% of the population. That's more than 10 times the global average. We don't think this is just Swedish pride, because other established markets are not far behind. In established markets like the U.K., Netherlands, Germany, and Australia, penetration typically ranges from 25%-50%, while faster-growing markets, they are earlier on this journey. Brazil is at 12%, the Philippines is at 4%, just above the global average. Our growth does not come from a single lever. It comes from a repeatable global playbook that we adapt locally to maximize growth. Simply put, first we attract listeners, then we build engagement. From here, we convert to subscriptions, then we deepen retention further, and over time, we grow revenue per user. Every market, every stage, it works. In Sweden, our most established market, paid penetration is approaching 50% of the population. in sweden our most established market paid penetration is approaching 50% of the population That's more than 10 times the global average. that's more than 10 times the global average We don't think this is just Swedish pride, because other established markets are not far behind. we don't think this is just swedish pride because other established markets are not far behind In established markets like the U.K., Netherlands, Germany, and Australia, penetration typically ranges from 25%-50%, while faster-growing markets, they are earlier on this journey. in established markets like the u.k netherlands germany and australia penetration typically ranges from 25%-50% while faster-growing markets they are earlier on this journey Brazil is at 12%, the Philippines is at 4%, just above the global average. brazil is at 12% the philippines is at 4% just above the global average Our growth does not come from a single lever. our growth does not come from a single lever It comes from a repeatable global playbook that we adapt locally to maximize growth. it comes from a repeatable global playbook that we adapt locally to maximize growth Simply put, first we attract listeners, then we build engagement. simply put first we attract listeners then we build engagement From here, we convert to subscriptions, then we deepen retention further, and over time, we grow revenue per user. from here we convert to subscriptions then we deepen retention further and over time we grow revenue per user Every market, every stage, it works. every market every stage it works This is exactly where our conviction for 1 billion subscribers come from. It is not a top-down time exercise, but built from what we've already seen playing out in the markets where this model has been running the longest. AI is accelerating every stage of the playbook with faster localization and a hyper-personalized premium funnel every single time a user opens the app. Our conviction is also grounded in something structural that we are very proud of. Spotify's business is both global and local in a way that is extremely hard to replicate. Global scale gives Spotify brand power, data advantages, network effects, while local expertise makes Spotify feel native to each market with the right artists, cultural moments, tiers, pricing, and partnerships. It all starts with winning listeners. This is exactly where our conviction for 1 billion subscribers come from. this is exactly where our conviction for 1 billion subscribers come from It is not a top-down time exercise, but built from what we've already seen playing out in the markets where this model has been running the longest. it is not a top-down time exercise but built from what we've already seen playing out in the markets where this model has been running the longest AI is accelerating every stage of the playbook with faster localization and a hyper-personalized premium funnel every single time a user opens the app. ai is accelerating every stage of the playbook with faster localization and a hyper-personalized premium funnel every single time a user opens the app Our conviction is also grounded in something structural that we are very proud of. our conviction is also grounded in something structural that we are very proud of Spotify's business is both global and local in a way that is extremely hard to replicate. spotify's business is both global and local in a way that is extremely hard to replicate Global scale gives Spotify brand power, data advantages, network effects, while local expertise makes Spotify feel native to each market with the right artists, cultural moments, tiers, pricing, and partnerships. global scale gives spotify brand power data advantages network effects while local expertise makes spotify feel native to each market with the right artists cultural moments tiers pricing and partnerships It all starts with winning listeners. it all starts with winning listeners Before someone becomes a power-user, subscribes, buys an add-on, they choose Spotify. They first come to Spotify because they're looking for music. They choose to stay on Spotify because it quickly feels like the most personal, social, and culturally connected place to listen. They also choose Spotify because it is free. It can be easy to forget how magical this experience is. Remember when you first downloaded the app, you had instant access to all the world's music. Free is where it all begins. 71% of subscribers spend time on free before converting to Premium. Thanks to our investments in the free experience, we are creating an even bigger base of free users globally, migrating them to our paid product over time. Before someone becomes a power-user, subscribes, buys an add-on, they choose Spotify. before someone becomes a power-user subscribes buys an add-on they choose spotify They first come to Spotify because they're looking for music. they first come to spotify because they're looking for music They choose to stay on Spotify because it quickly feels like the most personal, social, and culturally connected place to listen. they choose to stay on spotify because it quickly feels like the most personal social and culturally connected place to listen They also choose Spotify because it is free. they also choose spotify because it is free It can be easy to forget how magical this experience is. it can be easy to forget how magical this experience is Remember when you first downloaded the app, you had instant access to all the world's music. remember when you first downloaded the app you had instant access to all the world's music Free is where it all begins. 71% of subscribers spend time on free before converting to Premium. free is where it all begins 71% of subscribers spend time on free before converting to premium Thanks to our investments in the free experience, we are creating an even bigger base of free users globally, migrating them to our paid product over time. thanks to our investments in the free experience we are creating an even bigger base of free users globally migrating them to our paid product over time Our updated free experience that rolled out globally last year, it has improved engagement and retention across the board, resulting in double-digit engagement lifts with outsized positive impact for Gen Z. Since our last Investor Day, we have increased our number of free users by roughly 90%. This free growth is accelerating, and we believe we are on the right path to reach 1 billion users before 2030. Music is universal, but taste is local. What works in Stockholm doesn't automatically work in Nashville, Rio, Mumbai. Only 47% of music streamed on Spotify is in English. Local music tops the charts and dominates listening in most countries around the world. In 90% of the cases, the top artist is performing in a local language. Our updated free experience that rolled out globally last year, it has improved engagement and retention across the board, resulting in double-digit engagement lifts with outsized positive impact for Gen Z. our updated free experience that rolled out globally last year it has improved engagement and retention across the board resulting in double-digit engagement lifts with outsized positive impact for gen z Since our last Investor Day, we have increased our number of free users by roughly 90%. since our last investor day we have increased our number of free users by roughly 90% This free growth is accelerating, and we believe we are on the right path to reach 1 billion users before 2030. this free growth is accelerating and we believe we are on the right path to reach 1 billion users before 2030 Music is universal, but taste is local. music is universal but taste is local What works in Stockholm doesn't automatically work in Nashville, Rio, Mumbai. what works in stockholm doesn't automatically work in nashville rio mumbai Only 47% of music streamed on Spotify is in English. only 47% of music streamed on spotify is in english Local music tops the charts and dominates listening in most countries around the world. local music tops the charts and dominates listening in most countries around the world In 90% of the cases, the top artist is performing in a local language. in 90% of the cases the top artist is performing in a local language To truly win, our product has to speak the language of the market, both literally and culturally. That's why Spotify DJ, one of our highest engagement features, has just expanded from English and Spanish into French, German, Italian, and Brazilian Portuguese. We will continue to expand this feature to more languages in the future. This expansion will happen much faster. What once took years of market-by-market investment now takes a fraction of the time. We are combining nearly 20 years of taste data with the speed of AI. This is where our global platform also becomes a local advantage. We combine superior discovery, personalization, and brand relevance with deep local understanding, strong partnerships with artists and other creators. Take our recent BTS album campaign. It was uniquely Spotify. To truly win, our product has to speak the language of the market, both literally and culturally. to truly win our product has to speak the language of the market both literally and culturally That's why Spotify DJ, one of our highest engagement features, has just expanded from English and Spanish into French, German, Italian, and Brazilian Portuguese. that's why spotify dj one of our highest engagement features has just expanded from english and spanish into french german italian and brazilian portuguese We will continue to expand this feature to more languages in the future. we will continue to expand this feature to more languages in the future This expansion will happen much faster. this expansion will happen much faster What once took years of market-by-market investment now takes a fraction of the time. what once took years of market-by-market investment now takes a fraction of the time We are combining nearly 20 years of taste data with the speed of AI. we are combining nearly 20 years of taste data with the speed of ai This is where our global platform also becomes a local advantage. this is where our global platform also becomes a local advantage We combine superior discovery, personalization, and brand relevance with deep local understanding, strong partnerships with artists and other creators. we combine superior discovery personalization and brand relevance with deep local understanding strong partnerships with artists and other creators Take our recent BTS album campaign. take our recent bts album campaign It was uniquely Spotify. it was uniquely spotify You saw millions of fans engaging in-app while thousands of fans enjoyed our concerts and fan events we had in New York, Seoul, São Paulo, Mexico City, Tokyo, Jakarta, and Manila. It was truly one global moment made local and interactive everywhere. When we get this right, product love, brand love, they reinforce each other. Word of mouth and artist advocacy, they are two of our most important acquisition levers. They're leading to astounding growth in every market. Free is where the relationship begins. At our festival, premium is the headliner. It is the best place to be a fan. It's a clear destination for the most engaged users who want more from music, podcasts, audiobooks, video, and fitness. The freemium model is all about driving this conversion. You saw millions of fans engaging in-app while thousands of fans enjoyed our concerts and fan events we had in New York, Seoul, São Paulo, Mexico City, Tokyo, Jakarta, and Manila. you saw millions of fans engaging in-app while thousands of fans enjoyed our concerts and fan events we had in new york seoul são paulo mexico city tokyo jakarta and manila It was truly one global moment made local and interactive everywhere. it was truly one global moment made local and interactive everywhere When we get this right, product love, brand love, they reinforce each other. when we get this right product love brand love they reinforce each other Word of mouth and artist advocacy, they are two of our most important acquisition levers. word of mouth and artist advocacy they are two of our most important acquisition levers They're leading to astounding growth in every market. they're leading to astounding growth in every market Free is where the relationship begins. free is where the relationship begins At our festival, premium is the headliner. at our festival premium is the headliner It is the best place to be a fan. it is the best place to be a fan It's a clear destination for the most engaged users who want more from music, podcasts, audiobooks, video, and fitness. it's a clear destination for the most engaged users who want more from music podcasts audiobooks video and fitness The freemium model is all about driving this conversion. the freemium model is all about driving this conversion 10 years ago, only 32% of our U.S. and Canadian users paid for premium. Today, 60% are on premium. This is off of a base that is four times the size it was a decade ago. In Brazil, we've doubled the conversion rate since 2016 from 22% to 44% today, while the user base has grown 14 times, resulting in a 27x growth in subscribers. In our earlier stage markets across Asia, Middle East, and Africa, we're seeing massive free user growth. These two forces, significant and strong conversion in established markets alongside massive free user growth in developing markets, means our global conversion rate has actually stayed around 40% for many years. This is exactly how the model is supposed to work. This doesn't just happen. 10 years ago, only 32% of our U.S. and Canadian users paid for premium. 10 years ago only 32% of our u.s and canadian users paid for premium Today, 60% are on premium. today 60% are on premium This is off of a base that is four times the size it was a decade ago. In Brazil, we've doubled the conversion rate since 2016 from 22% to 44% today, while the user base has grown 14 times, resulting in a 27x growth in subscribers. this is off of a base that is four times the size it was a decade ago. in brazil we've doubled the conversion rate since 2016 from 22% to 44% today while the user base has grown 14 times resulting in a 27x growth in subscribers In our earlier stage markets across Asia, Middle East, and Africa, we're seeing massive free user growth. in our earlier stage markets across asia middle east and africa we're seeing massive free user growth These two forces, significant and strong conversion in established markets alongside massive free user growth in developing markets, means our global conversion rate has actually stayed around 40% for many years. these two forces significant and strong conversion in established markets alongside massive free user growth in developing markets means our global conversion rate has actually stayed around 40% for many years This is exactly how the model is supposed to work. this is exactly how the model is supposed to work This doesn't just happen. this doesn't just happen Over the last 20 years, we have fine-tuned one of the world's highest-performing freemium engines. We know how to best design our free and premium tiering system, when to bring premium marketing and offers to the right user at the right time, and now AI is turbocharging this. Over time, users can move through the portfolio as their needs and willingness to pay grow, student to individual to duo to family, and eventually into add-ons and higher value experiences. A user who enters on individual and moves on to family and then buys an Audiobooks+ subscription is our highest LTV cohort. To help you understand the full picture, I want to visit three markets. They show the arc of our model from established, to scaling, to enormous long-term opportunity. We will start with the U.S. Over the last 20 years, we have fine-tuned one of the world's highest-performing freemium engines. over the last 20 years we have fine-tuned one of the world's highest-performing freemium engines We know how to best design our free and premium tiering system, when to bring premium marketing and offers to the right user at the right time, and now AI is turbocharging this. we know how to best design our free and premium tiering system when to bring premium marketing and offers to the right user at the right time and now ai is turbocharging this Over time, users can move through the portfolio as their needs and willingness to pay grow, student to individual to duo to family, and eventually into add-ons and higher value experiences. over time users can move through the portfolio as their needs and willingness to pay grow student to individual to duo to family and eventually into add-ons and higher value experiences A user who enters on individual and moves on to family and then buys an Audiobooks+ subscription is our highest LTV cohort. a user who enters on individual and moves on to family and then buys an audiobooks+ subscription is our highest ltv cohort To help you understand the full picture, I want to visit three markets. to help you understand the full picture i want to visit three markets They show the arc of our model from established, to scaling, to enormous long-term opportunity. they show the arc of our model from established to scaling to enormous long-term opportunity We will start with the U.S. we will start with the u.s The U.S. is the world's biggest music market, and we have been capturing more of it every single year. Our free tier is increasing engagement and retention amongst U.S. users, and this engagement is converting. MIDiA data shows that we have grown our U.S. premium market share by 8-10 percentage points over the last six years with gains every single year without exception. Where we have established a large subscriber base, like in the U.S., is also where we have the most permission to introduce additional paid products. Our U.S. Premium users, they are deepening the relationship with Spotify. They're adding podcasts and audiobooks on top of music, meaning more listening days per month, stronger retention year-over-year, and this deep subscriber engagement leads to higher ARPU as we can serve our power users with products like Audiobooks+. The U.S. is the world's biggest music market, and we have been capturing more of it every single year. the u.s is the world's biggest music market and we have been capturing more of it every single year Our free tier is increasing engagement and retention amongst U.S. users, and this engagement is converting. our free tier is increasing engagement and retention amongst u.s users and this engagement is converting MIDiA data shows that we have grown our U.S. premium market share by 8-10 percentage points over the last six years with gains every single year without exception. midia data shows that we have grown our u.s premium market share by 8-10 percentage points over the last six years with gains every single year without exception Where we have established a large subscriber base, like in the U.S., is also where we have the most permission to introduce additional paid products. where we have established a large subscriber base like in the u.s is also where we have the most permission to introduce additional paid products Our U.S. our u.s Premium users, they are deepening the relationship with Spotify. premium users they are deepening the relationship with spotify They're adding podcasts and audiobooks on top of music, meaning more listening days per month, stronger retention year-over-year, and this deep subscriber engagement leads to higher ARPU as we can serve our power users with products like Audiobooks+. they're adding podcasts and audiobooks on top of music meaning more listening days per month stronger retention year-over-year and this deep subscriber engagement leads to higher arpu as we can serve our power users with products like audiobooks+ With paid penetration still under 20% in the U.S., there's a lot of runway left here. Across our established markets show the same similar story. Now let's move to Brazil. Brazil is a passionate music market where culture moves fast. Spotify has built exceptional brand strength in Brazil. What matters most is what we're building beneath this growth. It's infrastructure that compounds. Local artist partnerships, culturally resonant editorial, campaigns that embed Spotify into the moments people care about. Like our Q1 summer hit celebration, over 300,000 fans voted in-app, crowning Anitta as the queen of the Brazilian summer, and local payment options. Pix reaches almost every adult in Brazil, we were one of the first merchants to integrate Pix Automático, the recurring version in 2025, at a 90% lower cost than taking credit cards. With paid penetration still under 20% in the U.S., there's a lot of runway left here. with paid penetration still under 20% in the u.s there's a lot of runway left here Across our established markets show the same similar story. across our established markets show the same similar story Now let's move to Brazil. now let's move to brazil Brazil is a passionate music market where culture moves fast. brazil is a passionate music market where culture moves fast Spotify has built exceptional brand strength in Brazil. spotify has built exceptional brand strength in brazil What matters most is what we're building beneath this growth. what matters most is what we're building beneath this growth It's infrastructure that compounds. it's infrastructure that compounds Local artist partnerships, culturally resonant editorial, campaigns that embed Spotify into the moments people care about. local artist partnerships culturally resonant editorial campaigns that embed spotify into the moments people care about Like our Q1 summer hit celebration, over 300,000 fans voted in-app, crowning Anitta as the queen of the Brazilian summer, and local payment options. like our q1 summer hit celebration over 300,000 fans voted in-app crowning anitta as the queen of the brazilian summer and local payment options Pix reaches almost every adult in Brazil, we were one of the first merchants to integrate Pix Automático, the recurring version in 2025, at a 90% lower cost than taking credit cards. pix reaches almost every adult in brazil we were one of the first merchants to integrate pix automático the recurring version in 2025 at a 90% lower cost than taking credit cards Since 2022, we have doubled net additions in Brazil. 2025 was our strongest year ever for subs intake, and this momentum is accelerating. In 2026, revenue is going to grow with more than 30% year-over-year. Let's close out with India. 150 million smartphones are shipped in India each year. According to World Data Lab, India is contributing the largest share of new consumer growth in the world this year, surpassing China for the very first time. India's potential is enormous. When we launched in India in 2019, we were the 10th player in one of the most competitive streaming markets in the world. Today, we are the leader in audio streaming. India now sits alongside the U.S. as one of our largest markets by MAU, and it has some of the highest brand love of all of our markets. Since 2022, we have doubled net additions in Brazil. 2025 was our strongest year ever for subs intake, and this momentum is accelerating. since 2022 we have doubled net additions in brazil 2025 was our strongest year ever for subs intake and this momentum is accelerating In 2026, revenue is going to grow with more than 30% year-over-year. in 2026 revenue is going to grow with more than 30% year-over-year Let's close out with India. 150 million smartphones are shipped in India each year. let's close out with india 150 million smartphones are shipped in india each year According to World Data Lab, India is contributing the largest share of new consumer growth in the world this year, surpassing China for the very first time. according to world data lab india is contributing the largest share of new consumer growth in the world this year surpassing china for the very first time India's potential is enormous. india's potential is enormous When we launched in India in 2019, we were the 10th player in one of the most competitive streaming markets in the world. when we launched in india in 2019 we were the 10th player in one of the most competitive streaming markets in the world Today, we are the leader in audio streaming. today we are the leader in audio streaming India now sits alongside the U.S. as one of our largest markets by MAU, and it has some of the highest brand love of all of our markets. india now sits alongside the u.s as one of our largest markets by mau and it has some of the highest brand love of all of our markets The subscription economy opportunity is enormous. Even with unique dynamics such as low data costs, high ad tolerance, today, less than 10% of our Indian users are on Premium. This isn't a challenge. It is our runway. User growth, especially when coupled with brand strength, market leadership, has been a consistent predictor of subscription growth across all our markets. We are adapting with local entertainment partnerships, deeper payments integration like UPI autopay, which accounts for over 90% of our intake at an 85% cheaper effective rate than credit cards. We've also introduced a new pricing tier, Premium Platinum, priced at just over 2x the cost of our standard premium offering. The early signals are very strong. In just a few months after launch, with minimal marketing, more than 7% of our subscribers are already on this higher value tier. The subscription economy opportunity is enormous. the subscription economy opportunity is enormous Even with unique dynamics such as low data costs, high ad tolerance, today, less than 10% of our Indian users are on Premium. even with unique dynamics such as low data costs high ad tolerance today less than 10% of our indian users are on premium This isn't a challenge. this isn't a challenge It is our runway. it is our runway User growth, especially when coupled with brand strength, market leadership, has been a consistent predictor of subscription growth across all our markets. user growth especially when coupled with brand strength market leadership has been a consistent predictor of subscription growth across all our markets We are adapting with local entertainment partnerships, deeper payments integration like UPI autopay, which accounts for over 90% of our intake at an 85% cheaper effective rate than credit cards. we are adapting with local entertainment partnerships deeper payments integration like upi autopay which accounts for over 90% of our intake at an 85% cheaper effective rate than credit cards We've also introduced a ne w pricing tier, Premium Platinum, priced at just over 2x the cost of our standard premium offering. we've also introduced a ne w pricing tier premium platinum priced at just over 2x the cost of our standard premium offering The early signals are very strong. the early signals are very strong In just a few months after launch, with minimal marketing, more than 7% of our subscribers are already on this higher value tier. in just a few months after launch with minimal marketing more than 7% of our subscribers are already on this higher value tier Even here, where we're still building the base, the demand curve is already showing us there is no such thing as an average user. It points to significant upside as we scale further. Overall, conversion is accelerating in India. In 2025, we added three times as many net subscribers as in 2022, and our subscriber count is seven times higher compared to when we presented at the last Investor Day. With 1.4 billion people, rising consumer spending, we can imagine a future with more than 150 million subscribers in India. If you zoom out, this playbook is working everywhere. This growth creates the foundation for the next part of the story, monetization. Over the last 20 years, we've proven people will pay for music globally. Even here, where we're still building the base, the demand curve is already showing us there is no such thing as an average user. even here where we're still building the base the demand curve is already showing us there is no such thing as an average user It points to significant upside as we scale further. it points to significant upside as we scale further Overall, conversion is accelerating in India. overall conversion is accelerating in india In 2025, we added three times as many net subscribers as in 2022, and our subscriber count is seven times higher compared to when we presented at the last Investor Day. in 2025 we added three times as many net subscribers as in 2022 and our subscriber count is seven times higher compared to when we presented at the last investor day With 1.4 billion people, rising consumer spending, we can imagine a future with more than 150 million subscribers in India. with 1.4 billion people rising consumer spending we can imagine a future with more than 150 million subscribers in india If you zoom out, this playbook is working everywhere. if you zoom out this playbook is working everywhere This growth creates the foundation for the next part of the story, monetization. this growth creates the foundation for the next part of the story monetization Over the last 20 years, we've proven people will pay for music globally. over the last 20 years we've proven people will pay for music globally For much of our history, we have kept pricing low, which helped us first introduce streaming at scale. Three years ago, we hadn't moved the baseline price in 15 years. Now, pricing strategy is showing up in the P&L. We're continuing to scale while raising price, because we keep expanding value, churn remains low, while the revenue impact is highly accretive. Pricing will continue to be a tool in our toolbox. We think long and hard about when to increase. You can expect us to continue on this journey. As we've said before, we always want the user to win. They should always feel like they're getting more value. This is how we ensure that their time and money is well spent. It's the perfect recipe for lifetime value. For much of our history, we have kept pricing low, which helped us first introduce streaming at scale. for much of our history we have kept pricing low which helped us first introduce streaming at scale Three years ago, we hadn't moved the baseline price in 15 years. three years ago we hadn't moved the baseline price in 15 years Now, pricing strategy is showing up in the P&L. We're continuing to scale while raising price, because we keep expanding value, churn remains low, while the revenue impact is highly accretive. now pricing strategy is showing up in the p&l. we're continuing to scale while raising price because we keep expanding value churn remains low while the revenue impact is highly accretive Pricing will continue to be a tool in our toolbox. pricing will continue to be a tool in our toolbox We think long and hard about when to increase. we think long and hard about when to increase You can expect us to continue on this journey. you can expect us to continue on this journey As we've said before, we always want the user to win. as we've said before we always want the user to win They should always feel like they're getting more value. they should always feel like they're getting more value This is how we ensure that their time and money is well spent. this is how we ensure that their time and money is well spent It's the perfect recipe for lifetime value. it's the perfect recipe for lifetime value With highly retained and engaged subscribers, this revenue opportunity goes beyond price. This is the power law in action. Markets with the highest level of engagement and where we can see the strongest subscription performance, the highest level of podcast and audiobook adoption, and the highest willingness to purchase additional item. Today, we have nearly 300 million Premium subscribers. This is the starting point, not the ceiling. Every market in this company's history has followed the same arc. We know this playbook works, and now AI is helping to accelerate every stage. The path to 1 billion subscribers is not just a long-term aspiration. We believe this is an extrapolation of what we've already proven, continent by continent, market by market, user by user. With highly retained and engaged subscribers, this revenue opportunity goes beyond price. with highly retained and engaged subscribers this revenue opportunity goes beyond price This is the power law in action. this is the power law in action Markets with the highest level of engagement and where we can see the strongest subscription performance, the highest level of podcast and audiobook adoption, and the highest willingness to purchase additional item. markets with the highest level of engagement and where we can see the strongest subscription performance the highest level of podcast and audiobook adoption and the highest willingness to purchase additional item Today, we have nearly 300 million Premium subscribers. today we have nearly 300 million premium subscribers This is the starting point, not the ceiling. this is the starting point not the ceiling Every market in this company's history has followed the same arc. every market in this company's history has followed the same arc We know this playbook works, and now AI is helping to accelerate every stage. we know this playbook works and now ai is helping to accelerate every stage The path to 1 billion subscribers is not just a long-term aspiration. the path to 1 billion subscribers is not just a long-term aspiration We believe this is an extrapolation of what we've already proven, continent by continent, market by market, user by user. we believe this is an extrapolation of what we've already proven continent by continent market by market user by user To talk about why people stay, why they spend, and why they love Spotify more than any other audio product on Earth, I'm going to pass things on to Nicole. To talk about why people stay, why they spend, and why they love Spotify more than any other audio product on Earth, I'm going to pass things on to Nicole. to talk about why people stay why they spend and why they love spotify more than any other audio product on earth i'm going to pass things on to nicole

Speaker 15: Thank you, Gustav. Every December, Wrapped takes over. Social feeds fill up at levels usually reserved for championship games or the biggest award shows. A Spotify product experience quickly becomes something people use to express who they are and connect with others. That's because Spotify is where product and culture meet. Last year alone, Wrapped generated more than 620 million shares. Why is Spotify able to deliver a marketing campaign that becomes a cultural phenomenon year after year? It starts with a simple idea, no regrets. Every day, we make deliberate choices so that time with Spotify feels worth it. We take ordinary moments and make them more engaging, more personal, and more meaningful through the experiences we create. This belief and the choices we make as we build trust with the user shapes how we design. Thank you, Gustav. thank you gustav Every December, Wrapped takes over. every december wrapped takes over Social feeds fill up at levels usually reserved for championship games or the biggest award shows. social feeds fill up at levels usually reserved for championship games or the biggest award shows A Spotify product experience quickly becomes something people use to express who they are and connect with others. a spotify product experience quickly becomes something people use to express who they are and connect with others That's because Spotify is where product and culture meet. that's because spotify is where product and culture meet Last year alone, Wrapped generated more than 620 million shares. last year alone wrapped generated more than 620 million shares Why is Spotify able to deliver a marketing campaign that becomes a cultural phenomenon year after year? why is spotify able to deliver a marketing campaign that becomes a cultural phenomenon year after year It starts with a simple idea, no regrets. it starts with a simple idea no regrets Every day, we make deliberate choices so that time with Spotify feels worth it. every day we make deliberate choices so that time with spotify feels worth it We take ordinary moments and make them more engaging, more personal, and more meaningful through the experiences we create. we take ordinary moments and make them more engaging more personal and more meaningful through the experiences we create This belief and the choices we make as we build trust with the user shapes how we design. this belief and the choices we make as we build trust with the user shapes how we design It keeps us focused on experiences people value and deliberately choose to come back to, making us more efficient in how we invest our time and effort. AI is accelerating that dramatically. It is helping us move from signal to insight faster than ever before, interpreting user intent, identifying what matters earlier, and giving our teams a clearer view of where Spotify can create even more value. That matters because great product design starts with human judgment. AI does not replace that judgment, it strengthens it. It helps us focus our teams on the opportunities most likely to deepen the relationship between Spotify and our users. That means we can deliver a better Spotify to more than 760 million users while staying disciplined about what deserves to be built and scaled. It keeps us focused on experiences people value and deliberately choose to come back to, making us more efficient in how we invest our time and effort. it keeps us focused on experiences people value and deliberately choose to come back to making us more efficient in how we invest our time and effort AI is accelerating that dramatically. ai is accelerating that dramatically It is helping us move from signal to insight faster than ever before, interpreting user intent, identifying what matters earlier, and giving our teams a clearer view of where Spotify can create even more value. it is helping us move from signal to insight faster than ever before interpreting user intent identifying what matters earlier and giving our teams a clearer view of where spotify can create even more value That matters because great product design starts with human judgment. that matters because great product design starts with human judgment AI does not replace that judgment, it strengthens it. ai does not replace that judgment it strengthens it It helps us focus our teams on the opportunities most likely to deepen the relationship between Spotify and our users. it helps us focus our teams on the opportunities most likely to deepen the relationship between spotify and our users That means we can deliver a better Spotify to more than 760 million users while staying disciplined about what deserves to be built and scaled. that means we can deliver a better spotify to more than 760 million users while staying disciplined about what deserves to be built and scaled When users feel their time with Spotify is time well spent, that encourages exploration. When people feel Spotify is genuinely enriching their lives through music, they become much more open to discovering podcasts, fitness, audiobooks, and other experiences across more moments of their day. In April, we partnered with Morning Consult and Burson on a major brand affinity study across six major markets. What stood out was not just the ranking, but how people described their experience. Across major platforms, Spotify ranked number one for time well spent. Asked the inverse, which service they never regret using? Again, Spotify ranked number 1. Two questions, same answer. The signal's even stronger with Gen Z, one of our fastest-growing audiences. Gen Z was our strongest generational cohort on time well spent, with almost 90% reporting overall satisfaction with Spotify. When users feel their time with Spotify is time well spent, that encourages exploration. when users feel their time with spotify is time well spent that encourages exploration When people feel Spotify is genuinely enriching their lives through music, they become much more open to discovering podcasts, fitness, audiobooks, and other experiences across more moments of their day. when people feel spotify is genuinely enriching their lives through music they become much more open to discovering podcasts fitness audiobooks and other experiences across more moments of their day In April, we partnered with Morning Consult and Burson on a major brand affinity study across six major markets. in april we partnered with morning consult and burson on a major brand affinity study across six major markets What stood out was not just the ranking, but how people described their experience. what stood out was not just the ranking but how people described their experience Across major platforms, Spotify ranked number one for time well spent. across major platforms spotify ranked number one for time well spent Asked the inverse, which service they never regret using? asked the inverse which service they never regret using Again, Spotify ranked number 1. again spotify ranked number 1 Two questions, same answer. two questions same answer The signal's even stronger with Gen Z, one of our fastest-growing audiences. the signal's even stronger with gen z one of our fastest-growing audiences Gen Z was our strongest generational cohort on time well spent, with almost 90% reporting overall satisfaction with Spotify. gen z was our strongest generational cohort on time well spent with almost 90% reporting overall satisfaction with spotify For Gen Z, Spotify is not just something they use. It consistently feels worth it. That matters, especially at a time when parents, myself included, are increasingly mindful of the time their kids and teens spend with screens. Not only is this the right product philosophy, it is also good business. It builds trust, it strengthens habits, and it makes people more likely to recommend the experience to others. The single biggest source of new Spotify users is still a recommendation from an existing user. That only happens when the product consistently delivers. Brand love is not just a sentiment metric. It is acquisition leverage. It improves the efficiency of paid marketing, reinforces conversion from Spotify Free to Spotify Premium, and strengthens retention once people subscribe. For Gen Z, Spotify is not just something they use. for gen z spotify is not just something they use It consistently feels worth it. it consistently feels worth it That matters, especially at a time when parents, myself included, are increasingly mindful of the time their kids and teens spend with screens. Not only is this the right product philosophy, it is also good business. that matters especially at a time when parents myself included are increasingly mindful of the time their kids and teens spend with screens. not only is this the right product philosophy it is also good business It builds trust, it strengthens habits, and it makes people more likely to recommend the experience to others. it builds trust it strengthens habits and it makes people more likely to recommend the experience to others The single biggest source of new Spotify users is still a recommendation from an existing user. the single biggest source of new spotify users is still a recommendation from an existing user That only happens when the product consistently delivers. that only happens when the product consistently delivers Brand love is not just a sentiment metric. brand love is not just a sentiment metric It is acquisition leverage. it is acquisition leverage It improves the efficiency of paid marketing, reinforces conversion from Spotify Free to Spotify Premium, and strengthens retention once people subscribe. it improves the efficiency of paid marketing reinforces conversion from spotify free to spotify premium and strengthens retention once people subscribe In fact, just last week, we launched a special on-platform experience to celebrate Spotify's 20th birthday. In the first six days, almost 100 million people engaged in the experience, helping drive our single biggest day of subscriber intake ever. When you choose what to listen to, shape a playlist, or go deeper into a song's DNA, you are investing attention. On Spotify, you leave with something, a mood shifted, an idea sparked, or a connection deepened. We hear from users again and again how Spotify is their companion throughout the day, even enhancing the experience of chores, cooking, and focus time. Music, books, and podcasts are not disposable formats. They ask for attention and intention, and that effort creates meaning. Because in a world of infinite content, the winners will not be the platforms that take the most time. In fact, just last week, we launched a special on-platform experience to celebrate Spotify's 20th birthday. in fact just last week we launched a special on-platform experience to celebrate spotify's 20th birthday In the first six days, almost 100 million people engaged in the experience, helping drive our single biggest day of subscriber intake ever. in the first six days almost 100 million people engaged in the experience helping drive our single biggest day of subscriber intake ever When you choose what to listen to, shape a playlist, or go deeper into a song's DNA, you are investing attention. when you choose what to listen to shape a playlist or go deeper into a song's dna you are investing attention On Spotify, you leave with something, a mood shifted, an idea sparked, or a connection deepened. on spotify you leave with something a mood shifted an idea sparked or a connection deepened We hear from users again and again how Spotify is their companion throughout the day, even enhancing the experience of chores, cooking, and focus time. we hear from users again and again how spotify is their companion throughout the day even enhancing the experience of chores cooking and focus time Music, books, and podcasts are not disposable formats. music books and podcasts are not disposable formats They a sk for attention and intention, and that effort creates meaning. they a sk for attention and intention and that effort creates meaning Because in a world of infinite content, the winners will not be the platforms that take the most time. because in a world of infinite content the winners will not be the platforms that take the most time They will be the ones that make time feel most valuable. Now, Nat will show you how that philosophy comes to life in the product. Thank you. They will be the ones that make time feel most valuable. they will be the ones that make time feel most valuable Now, Nat will show you how that philosophy comes to life in the product. now nat will show you how that philosophy comes to life in the product Thank you. thank you

Speaker 14: Thank you. At Spotify's scale, product development starts with noticing user behavior, whether it's a playlist people share, a prompt they repeat, a feature used in ways we just didn't expect. The opportunity is not to chase every signal, but to identify the ones that can improve retention, conversion, and long-term value. That is the model we're focused on. Observe demand, build the right experience, measure whether it deepens habit, then scale what strengthens the business. SongDNA and About the Song are good examples. Fans don't just want the track, they want the meaning, the collaborators, the samples, the influences, and the creative process behind it all. We turned that desire into a native Spotify experience. Thank you. thank you At Spotify's scale, product development starts with noticing user behavior, whether it's a playlist people share, a prompt they repeat, a feature used in ways we just didn't expect. at spotify's scale product development starts with noticing user behavior whether it's a playlist people share a prompt they repeat a feature used in ways we just didn't expect The opportunity is not to chase every signal, but to identify the ones that can improve retention, conversion, and long-term value. the opportunity is not to chase every signal but to identify the ones that can improve retention conversion and long-term value That is the model we're focused on. that is the model we're focused on Observe demand, build the right experience, measure whether it deepens habit, then scale what strengthens the business. observe demand build the right experience measure whether it deepens habit then scale what strengthens the business SongDNA and About the Song are good examples. songdna and about the song are good examples Fans don't just want the track, they want the meaning, the collaborators, the samples, the influences, and the creative process behind it all. fans don't just want the track they want the meaning the collaborators the samples the influences and the creative process behind it all We turned that desire into a native Spotify experience. we turned that desire into a native spotify experience Since launching in March, more than 70 million subscribers have used SongDNA, generating more than 265 million interactions, with Gen Z leading the way as early power users. About the Song shows the same pattern, with three out of four users rating the feature positively. The important point is not just that users like these features. It is that deeper context creates higher intent sessions, turning listening into discovery, fandom, and repeat engagement. That gives users more reasons to stay inside Spotify, and it gives creators and rights holders better ways to connect with the audience already there. That is what separates meaningful discovery from empty engagement, and it also shows how time well-spent changes the way we build. Since launching in March, more than 70 million subscribers have used SongDNA, generating more than 265 million interactions, with Gen Z leading the way as early power users. since launching in march more than 70 million subscribers have used songdna generating more than 265 million interactions with gen z leading the way as early power users About the Song shows the same pattern, with three out of four users rating the feature positively. about the song shows the same pattern with three out of four users rating the feature positively The important point is not just that users like these features. the important point is not just that users like these features It is tha t deeper context creates higher intent sessions, turning listening into discovery, fandom, and repeat engagement. it is tha t deeper context creates higher intent sessions turning listening into discovery fandom and repeat engagement That gives users more reasons to stay inside Spotify, and it gives creators and rights holders better ways to connect with the audience already there. that gives users more reasons to stay inside spotify and it gives creators and rights holders better ways to connect with the audience already there That is what separates meaningful discovery from empty engagement, and it also shows how time well-spent changes the way we build. that is what separates meaningful discovery from empty engagement and it also shows how time well-spent changes the way we build When you are clear on the kind of time you are trying to create, you stop investing in features that simply fill the space, and focus instead on experiences people actively choose, return to, and share with others. That focus becomes even more powerful when the path from vision to execution gets shorter. AI is dramatically reducing the time and cost of turning ideas into real product experiences. Months become weeks become days, and work that once took entire planning cycles can now happen far faster. As Nicholas will discuss later, at Spotify, any employee can now create a new Spotify experience and instantly make it available in our internal app store for others to try. This kind of AI-powered prototyping expands who can contribute ideas. When you are clear on the kind of time you are trying to create, you stop investing in features that simply fill the space, and focus instead on experiences people actively choose, return to, and share with others. when you are clear on the kind of time you are trying to create you stop investing in features that simply fill the space and focus instead on experiences people actively choose return to and share with others That focus becomes even more powerful when the path from vision to execution gets shorter. that focus becomes even more powerful when the path from vision to execution gets shorter AI is dramatically reducing the time and cost of turning ideas into real product experiences. ai is dramatically reducing the time and cost of turning ideas into real product experiences Months become weeks become days, and work that once took entire planning cycles can now happen far faster. months become weeks become days and work that once took entire planning cycles can now happen far faster As Nicholas will discuss later, at Spotify, any em ployee can now create a new Spotify experience and instantly make it available in our internal app store for others to try. as nicholas will discuss later at spotify any em ployee can now create a new spotify experience and instantly make it available in our internal app store for others to try This kind of AI-powered prototyping expands who can contribute ideas. this kind of ai-powered prototyping expands who can contribute ideas It helps teams align around something tangible, and it accelerates learning about what deserves deeper investment. This speed and focus benefits the product and the users in three ways: more control, deeper connection, and richer personalization. First, control. People want Spotify to respond to them, not the other way around. That is why we build features that let users tailor the experience around the moment that they're in. Video toggle is a simple example. Users can decide when video adds to the experience. That kind of control builds confidence. You can see it in the way people spend time curating their exact Olivia Dean or Justin Bieber playlists, and then later unwind with a Bobby Lee or Amy Poehler podcast. It helps teams align around something tangible, and it accelerates learning about what deserves deeper investment. it helps teams align around something tangible and it accelerates learning about what deserves deeper investment This speed and focus benefits the product and the users in three ways: more control, deeper connection, and richer personalization. this speed and focus benefits the product and the users in three ways more control deeper connection and richer personalization First, control. People want Spotify to respo nd to them, not the other way around. first control. people want spotify to respo nd to them not the other way around That is why we build features that let users tailor the experience around the moment that they're in. that is why we build features that let users tailor the experience around the moment that they're in Video toggle is a simple example. video toggle is a simple example Users can decide when video adds to the experience. users can decide when video adds to the experience That kind of control builds confidence. that kind of control builds confidence You can see it in the way people spend time curating their exact Olivia Dean or Justin Bieber playlists, and then later unwind with a Bobby Lee or Amy Poehler podcast. you can see it in the way people spend time curating their exact olivia dean or justin bieber playlists and then later unwind with a bobby lee or amy poehler podcast When people can customize the experience, they trust it, return to it, and make it part of their daily lives. Second, connection. As generative AI increases the volume of content, connection to the people behind the art becomes even more important. Spotify goes beyond helping people find something to listen to or to watch. We help them understand who made it, why it matters, and where to go next. Third, personalization. Taste Profile gives people more direct control over how Spotify understands them across music, podcasts, and audiobooks. Increasingly, users can engage with Spotify in natural language and have the experience adjust to them in real time. This is where AI becomes a true tailwind. Spotify is not just predicting what might come next. When people can customize the experience, they trust it, return to it, and make it part of their daily lives. when people can customize the experience they trust it return to it and make it part of their daily lives Second, connection. second connection As generative AI increases the volume of content, connection to the people behind the art becomes even more important. as generative ai increases the volume of content connection to the people behind the art becomes even more important Spotify goes beyond helping people find something to listen to or to watch. spotify goes beyond helping people find something to listen to or to watch We help them understand who made it, why it matters, and where to go next. we help them understand who made it why it matters and where to go next Third, personalization. third personalization Taste Profile gives people more direct control over how Spotify understands them across music, podcasts, and audiobooks. taste profile gives people more direct control over how spotify understands them across music podcasts and audiobooks Increasingly, users can engage with Spotify in natural language and have the experience adjust to them in real time. increasingly users can engage with spotify in natural language and have the experience adjust to them in real time This is where AI becomes a true tailwind. this is where ai becomes a true tailwind Spotify is not just predicting what might come next. spotify is not just predicting what might come next It is becoming more interactive, listening, interpreting, and responding while building a deeper understanding of who you are and how your taste is changing. That shifts the relationship. The more you invest, the more Spotify feels personal, useful, and relevant. As the platform grows, every new single helps us understand users better and increases the value they get. The richer that system becomes, the smarter and more effective Spotify gets across every vertical you will hear about today. To take you deeper into where it all began and where the opportunity is still expanding, here is Charlie Hellman, Head of Music. It is becoming more interactive, listening, interpreting, and responding while building a deeper understanding of who you are and how your taste is changing. it is becoming more interactive listening interpreting and responding while building a deeper understanding of who you are and how your taste is changing That shifts the relationship. that shifts the relationship The more you invest, the more Spotify feels personal, useful, and relevant. the more you invest the more spotify feels personal useful and relevant As the platform grows, every new single helps us understand users better and increases the value they get. as the platform grows every new single helps us understand users better and increases the value they get The richer that system becomes, the smarter and more effective Spotify gets across every vertical you will hear about today. the richer that system becomes the smarter and more effective spotify gets across every vertical you will hear about today To take you deeper into where it all began and where the opportunity is still expanding, here is Charlie Hellman, Head of Music. to take you deeper into where it all began and where the opportunity is still expanding here is charlie hellman head of music

Speaker 3: Thanks, Nat. Even at the scale we've achieved, hundreds of millions of subscribers, Spotify continues to strengthen its role as the primary driver of growth for music. In 2025 alone, we paid more than $11 billion to the music industry, increasing more than 10% year-over-year. That's more than double the growth rate of the music industry's other revenue sources combined. Our all-time payouts now exceed $70 billion. No retailer in history has put this much money back into music, that, in turn, has created the capacity for more successful artists than ever. The number of artists generating more than $100,000 a year from Spotify alone has more than tripled since 2017. Thanks, Nat. thanks nat Even at the scale we've achieved, hundreds of millions of subscribers, Spotify continues to strengthen its role as the primary driver of growth for music. even at the scale we've achieved hundreds of millions of subscribers spotify continues to strengthen its role as the primary driver of growth for music In 2025 alone, we paid more than $11 billion to the music industry, increasing more than 10% year-over-year. in 2025 alone we paid more than $11 billion to the music industry increasing more than 10% year-over-year That's more than double the growth rate of the music industry's other revenue sources combined. that's more than double the growth rate of the music industry's other revenue sources combined Our all-time payouts now exceed $70 billion. our all-time payouts now exceed $70 billion No retailer in history has put this much money back into music, that, in turn, has created the capacity for more successful artists than ever. no retailer in history has put this much money back into music that in turn has created the capacity for more successful artists than ever The number of artists generating more than $100,000 a year from Spotify alone has more than tripled since 2017. the number of artists generating more than $100,000 a year from spotify alone has more than tripled since 2017 That earning potential is powered by our subscriber base expansion, our personalized recommendations that connect any type of artists to the right fans, and our marketplace promotional tools that allow artists to bet on themselves and propel their own success. Our promotional tools for artists have become the most relied-upon marketing engine across the industry for both new releases and older catalog, from the biggest labels in the world to the do-it-yourself artists. That value we're providing to the industry is reflected in the increased demand we see for these tools. The gross profit contribution of marketplace tools has grown 4X in the last four years. This is what we do. We identify hard problems in music for artists, for fans, and build solutions that move the industry forward. That earning potential is powered by our subscriber base expansion, our personalized recommendations that connect any type of artists to the right fans, and our marketplace promotional tools that allow artists to bet on themselves and propel their own success. that earning potential is powered by our subscriber base expansion our personalized recommendations that connect any type of artists to the right fans and our marketplace promotional tools that allow artists to bet on themselves and propel their own success Our promotional tools for artists have become the most relied-upon marketing engine across the industry for both new releases and older catalog, fro m the biggest labels in the world to the do-it-yourself artists. our promotional tools for artists have become the most relied-upon marketing engine across the industry for both new releases and older catalog fro m the biggest labels in the world to the do-it-yourself artists That value we're providing to the industry is reflected in the increased demand we see for these tools. that value we're providing to the industry is reflected in the increased demand we see for these tools The gross profit contribution of marketplace tools has grown 4X in the last four years. the gross profit contribution of marketplace tools has grown 4x in the last four years This is what we do. this is what we do We identify hard problems in music for artists, for fans, and build solutions that move the industry forward. we identify hard problems in music for artists for fans and build solutions that move the industry forward We did it with piracy, creating a legal experience better than the illegal one. We did it with streaming, turning the access model into real income. We did it with discovery, helping more artists find and connect with audiences, even as the volume of music has grown exponentially. It's only continued. Technology's been expanding music creation for decades, from bedroom production tools to do-it-yourself global distribution. More artists have been able to reach audiences and create than ever before. Spotify's always benefited from that growth, and our job is to make sure that that growth translates into real opportunity for artists. Today, we're entering a new moment. Generative AI is accelerating creation at an unprecedented pace. In many ways, this feels like a continuation of the same trend. We did it with piracy, creating a legal experience better than the illegal one. we did it with piracy creating a legal experience better than the illegal one We did it with streaming, turning the access model into real income. we did it with streaming turning the access model into real income We did it with discovery, helping more artists find and connect with audiences, even as the volume of music has grown exponentially. we did it with discovery helping more artists find and connect with audiences even as the volume of music has grown exponentially It's only continued. it's only continued Technology's been expanding music creation for decades, from bedroom production tools to do-it-yourself global distribution. technology's been expanding music creation for decades from bedroom production tools to do-it-yourself global distribution More artists have been able to reach audiences and create than ever before. more artists have been able to reach audiences and create than ever before Spotify's always benefited from that growth, and our job is to make sure that that growth translates into real opportunity for artists. spotify's always benefited from that growth and our job is to make sure that that growth translates into real opportunity for artists Today, we're entering a new moment. today we're entering a new moment Generative AI is accelerating creation at an unprecedented pace. generative ai is accelerating creation at an unprecedented pace In many ways, this feels like a continuation of the same trend. in many ways this feels like a continuation of the same trend More music, more choice, more ways for fans to discover what they love. At the same time, things are starting to feel like the Wild West. Alongside new original work, there's a surge of covers, remixes, reinterpretations built on existing music. Without a rights system in place, artists can lose control of their work, and value can be created without it flowing back to the people who made it. That matters most for established artists, the ones who spent years building iconic bodies of work. This is exactly the kind of problem Spotify was built to solve. Done right, fans' desire to reinterpret music is an opportunity for revenue, for driving attention back to the original work. Catalog growth has always been good for Spotify. More music, more choice, more ways for fans to discover what they love. more music more choice more ways for fans to discover what they love At the same time, things are starting to feel like the Wild West. at the same time things are starting to feel like the wild west Alongside new original work, there's a surge of covers, remixes, reinterpretations built on existing music. alongside new original work there's a surge of covers remixes reinterpretations built on existing music Without a rights system in place, artists can lose control of their work, and value can be created without it flowing back to the people who made it. That matters most for established artists, the ones who spent years building iconic bodies of work. without a rights system in place artists can lose control of their work and value can be created without it flowing back to the people who made it. that matters most for established artists the ones who spent years building iconic bodies of work This is exactly the kind of problem Spotify was built to solve. this is exactly the kind of problem spotify was built to solve Done right, fans' desire to reinterpret music is an opportunity for revenue, for driving attention back to the original work. done right fans' desire to reinterpret music is an opportunity for revenue for driving attention back to the original work Catalog growth has always been good for Spotify. catalog growth has always been good for spotify We want to make sure that this next wave is good for artists, too. That means building a legal, responsible experience that's better than today's rogue alternatives, where fans can create, and artists can choose to participate and benefit. Today, we're announcing landmark licensing agreements with Universal Music Group and Universal Music Publishing Group. For the first time, fans will be able to legally create covers and remixes from participating artists' and songwriters' catalogs with both the original artist and the songwriter sharing in the value created. This will launch as a paid add-on, and our Premium users will be able to try it out first. All users on Spotify will be able to enjoy these songs. Fans create, they share, they bring new audiences back to the music they love. We want to make sure that this next wave is good for artists, too. we want to make sure that this next wave is good for artists too That means building a legal, responsible experience that's better than today's rogue alternatives, where fans can create, and artists can choose to participate and benefit. that means building a legal responsible experience that's better than today's rogue alternatives where fans can create and artists can choose to participate and benefit Today, we're announcing landmark licensing agreements with Universal Music Group and Universal Music Publishing Group. today we're announcing landmark licensing agreements with universal music group and universal music publishing group For the first time, fans will be able to legally create covers and remixes from participating artists' and songwriters' catalogs with both the original artist and the songwriter sharing in the value created. for the first time fans will be able to legally create covers and remixes from participating artists' and songwriters' catalogs with both the original artist and the songwriter sharing in the value created This will launch as a paid add-on, and our Premium users will be able to try it out first. this will launch as a paid add-on and our premium users will be able to try it out first All users on Spotify will be able to enjoy these songs. all users on spotify will be able to enjoy these songs Fans create, they share, they bring new audiences back to the music they love. fans create they share they bring new audiences back to the music they love Artists and songwriters participate in the value that their work inspires as a brand-new source of income on top of what they already earn on Spotify. For Spotify, it unlocks fan spending amongst our super users that doesn't exist today. The goal is simple: ensure that when fans create, artists benefit. This era of generation doesn't need to threaten the future of music. Because we built the system legal, trusted, and aligned, we can make sure that the value flows back to the people who created it. We're building with artists and songwriters. That means consent, credit, and compensation by design. That's how Spotify operates, and it's how we'll lead the industry into what comes next. Now, over to Joe. Artists and songwriters participate in the value that their work inspires as a brand-new source of income on top of what they already earn on Spotify. artists and songwriters participate in the value that their work inspires as a brand-new source of income on top of what they already earn on spotify For Spotify, it unlocks fan spending amongst our super users that doesn't exist today. for spotify it unlocks fan spending amongst our super users that doesn't exist today The goal is simple: ensure that when fans create, artists benefit. the goal is simple ensure that when fans create artists benefit This era of generation doesn't need to threaten the future of music. this era of generation doesn't need to threaten the future of music Because we built the system legal, trusted, and aligned, we can make sure that the value flows back to the people who created it. because we built the system legal trusted and aligned we can make sure that the value flows back to the people who created it We're building with artists and songwriters. we're building with artists and songwriters That means consent, credit, and compensation by design. that means consent credit and compensation by design That's how Spotify operates, and it's how we'll lead the industry into what comes next. that's how spotify operates and it's how we'll lead the industry into what comes next Now, over to Joe. now over to joe

Speaker 8: There we go. All right. Thank you, Charlie. Spotify has helped shape culture for years. It's probably not lost on anyone here that the most streamed artist in the world for the last six years sings in Spanish. We're proud to have played a role in helping Bad Bunny's music reach every corner of the world. Here's what most people don't realize. That doesn't happen automatically in some algorithm. We have people who live and breathe music culture all around the world. They know what's bubbling up before it hits a chart. When they spot something real, we can help it travel in ways no other platform can. That combination is hard to copy. Most platforms operate globally from a distance. We don't. There we go. there we go All right. all right Thank you, Charlie. thank you charlie Spotify has helped shape culture for years. spotify has helped shape culture for years It's probably not lost on anyone here that the most streamed artist in the world for the last six years sings in Spanish. it's probably not lost on anyone here that the most streamed artist in the world for the last six years sings in spanish We're proud to have played a role in helping Bad Bunny's music reach every corner of the world. we're proud to have played a role in helping bad bunny's music reach every corner of the world Here's what most people don't realize. here's what most people don't realize That doesn't happen automatically in some algorithm. that doesn't happen automatically in some algorithm We have people who live and breathe music culture all around the world. we have people who live and breathe music culture all around the world They know what's bubbling up before it hits a chart. they know what's bubbling up before it hits a chart When they spot something real, we can help it travel in ways no other platform can. when they spot something real we can help it travel in ways no other platform can That combination is hard to copy. that combination is hard to copy Most platforms operate globally from a distance. most platforms operate globally from a distance We don't. we don't We have the local instinct and the global reach, and they're working together in ways that no one else can replicate. In a world that is increasingly reliant on AI, the human expertise behind it becomes more scarce and more valuable. As Gustav said earlier, AI is only as good as the information it has access to, and we have two decades of it, two decades of editorial taste and cultural instincts from the world's best music editors. You combine that with a deep understanding of how hundreds of millions of people actually listen, and you have a foundation no one else can touch. We have the local instinct and the global reach, and they're working together in ways that no one else can replicate. we have the local instinct and the global reach and they're working together in ways that no one else can replicate In a world that is increasingly reliant on AI, the human expertise behind it becomes more scarce and more valuable. in a world that is increasingly reliant on ai the human expertise behind it becomes more scarce and more valuable As Gustav said earlier, AI is only as good as the information it has access to, and we have two decades of it, two decades of editorial taste and cultural instincts from the world's best music editors. as gustav said earlier ai is only as good as the information it has access to and we have two decades of it two decades of editorial taste and cultural instincts from the world's best music editors You combine that with a deep understanding of how hundreds of millions of people actually listen, and you have a foundation no one else can touch. you combine that with a deep understanding of how hundreds of millions of people actually listen and you have a foundation no one else can touch I mean, anyone can tell you that Bad Bunny has over 100 billion streams, but it takes taste and real human judgment to spot an underground breakout in Puerto Rico or an emerging scene in Copenhagen before anybody's noticed. That's a proprietary foundation that took us 20 years to build. You can't shortcut your way to it. We're investing in bringing that same expertise to the surface so fans can experience the human side of Spotify. That instinct is what's bringing our playlist editors in front of the camera. Next month, New Music Friday, one of the most recognized brands in music discovery, becomes a video series. Every week, our editors will bring their taste and authenticity directly to fans, breaking down why the world is talking about the songs that just dropped. I mean, anyone can tell you that Bad Bunny has over 100 billion streams, but it takes taste and real human judgment to spot an underground breakout in Puerto Rico or an emerging scene in Copenhagen before anybody's noticed. i mean anyone can tell you that bad bunny has over 100 billion streams but it takes taste and real human judgment to spot an underground breakout in puerto rico or an emerging scene in copenhagen before anybody's noticed That's a proprietary foundation that took us 20 years to build. that's a proprietary foundation that took us 20 years to build You can't shortcut your way to it. you can't shortcut your way to it We're investing in bringing that same expertise to the surface so fans can experience the human side of Spotify. we're investing in bringing that same expertise to the surface so fans can experience the human side of spotify That instinct is what's bringing our playlist editors in front of the camera. that instinct is what's bringing our playlist editors in front of the camera Next month, New Music Friday, one of the most recognized brands in music discovery, becomes a video series. next month new music friday one of the most recognized brands in music discovery becomes a video series Every week, our editors will bring their taste and authenticity directly to fans, breaking down why the world is talking about the songs that just dropped. every week our editors will bring their taste and authenticity directly to fans breaking down why the world is talking about the songs that just dropped That's what makes us different from anything an algorithm can produce. It's not just our editors. Artists are embracing video on Spotify, too. Here's something that might surprise you. Spotify is now one of the largest music video services in the world. Official music videos, live performances, covers, all of it lives on Spotify. It's seamless. You can flip from a track to a video with a single tap on your phone, tablet, TV, desktop. Today, more than two-thirds of all premium subscribers have watched music videos on Spotify. 65% say it makes their premium subscription more valuable. For our most engaged listeners, watching a video leads to an 85% increase in streams of that song in the following month. You might wonder, how much more value can we add to a premium subscription after 20 years? That's what makes us different from anything an algorithm can produce. that's what makes us different from anything an algorithm can produce It's not just our editors. it's not just our editors Artists are embracing video on Spotify, too. artists are embracing video on spotify too Here's something that might surprise you. here's something that might surprise you Spotify is now one of the largest music video services in the world. spotify is now one of the largest music video services in the world Official music videos, live performances, covers, all of it lives on Spotify. official music videos live performances covers all of it lives on spotify It's seamless. it's seamless You can flip from a track to a video with a single tap on your phone, tablet, TV, desktop. you can flip from a track to a video with a single tap on your phone tablet tv desktop Today, more than two-thirds of all premium subscribers have watched music videos on Spotify. 65% say it makes their premium subscription more valuable. today more than two-thirds of all premium subscribers have watched music videos on spotify 65% say it makes their premium subscription more valuable For our most engaged listeners, watching a video leads to an 85% increase in streams of that song in the following month. for our most engaged listeners watching a video leads to an 85% increase in streams of that song in the following month You might wonder, how much more value can we add to a premium subscription after 20 years? you might wonder how much more value can we add to a premium subscription after 20 years The answer is a lot. As Nat mentioned, SongDNA and About the Song have already transformed how fans connect with the music they love. You add video in the mix, and we've added more to the core music experience in the last 12 months than in many of the previous years combined. We're moving faster than ever. That video experience spans a full spectrum, from official music videos and live performances to original programming like Countdown To, Spotify Live Room, and Billions Club Live. Let's talk about Billions Club Live for a second. Billions Club Live celebrates artists whose streams have crossed 1 billion. For each performance, we bring the artist's top fans into the room with hundreds of millions of fans on our platform and the data to know who listens the most. The answer is a lot. the answer is a lot As Nat mentioned, SongDNA and About the Song have already transformed how fans connect with the music they love. as nat mentioned songdna and about the song have already transformed how fans connect with the music they love You add video in the mix, and we've added more to the core music experience in the last 12 months than in many of the previous years combined. you add video in the mix and we've added more to the core music experience in the last 12 months than in many of the previous years combined We're moving faster than ever. we're moving faster than ever That video experience spans a full spectrum, from official music videos and live performances to original programming like Countdown To, Spotify Live Room, and Billions Club Live. that video experience spans a full spectrum from official music videos and live performances to original programming like countdown to spotify live room and billions club live Let's talk about Billions Club Live for a second. Billions Club Live celebrates artists whose streams have crossed 1 billion. let's talk about billions club live for a second. billions club live celebrates artists whose streams have crossed 1 billion For each performance, we bring the artist's top fans into the room with hundreds of millions of fans on our platform and the data to know who listens the most. for each performance we bring the artist's top fans into the room with hundreds of millions of fans on our platform and the data to know who listens the most It's something only we can do. Each show is captured on film and released globally. You've got The Weeknd in Santa Monica, Miley Cyrus in Paris, Ed Sheeran in Dublin, Bad Bunny in Tokyo, and our most recent, Olivia Rodrigo in Barcelona. Just wait until you see the final edit of that show. Let's just say our sound engineers earned their keep. In every clip I saw, you could barely hear Olivia's voice. The crowd was singing every word back at the top of their lungs. Now imagine if we could ensure that fans like those kids in Barcelona, the ones who truly deserve to be in that room, actually get there, not just for a handful of superstars, for artists and tours at scale. Rene is going to tell you more about how we're making that happen. It's something only we can do. it's something only we can do Each show is captured on film and released globally. each show is captured on film and released globally You've got The Weeknd in Santa Monica, Miley Cyrus in Paris, Ed Sheeran in Dublin, Bad Bunny in Tokyo, and our most recent, Olivia Rodrigo in Barcelona. you've got the weeknd in santa monica miley cyrus in paris ed sheeran in dublin bad bunny in tokyo and our most recent olivia rodrigo in barcelona Just wait until you see the final edit of that show. just wait until you see the final edit of that show Let's just say our sound engineers earned their keep. let's just say our sound engineers earned their keep In every clip I saw, you could barely hear Olivia's voice. in every clip i saw you could barely hear olivia's voice The crowd was singing every word back at the top of their lungs. the crowd was singing every word back at the top of their lungs Now imagine if we could ensure that fans like those kids in Barcelona, the ones who truly deserve to be in that room, actually get there, not just for a handful of superstars, for artists and tours at scale. now imagine if we could ensure that fans like those kids in barcelona the ones who truly deserve to be in that room actually get there not just for a handful of superstars for artists and tours at scale Rene is going to tell you more about how we're making that happen. rene is going to tell you more about how we're making that happen

Speaker 18: Thanks, Joe. We have all experienced it. Your favorite artist announces a tour. You are desperate for tickets. You clear your calendar. You set an alarm for the moment you can buy. The clock strikes. You are in, you are ready to go, somehow you're already behind thousands of people, likely also including bots and scalpers planning to buy tickets that they will personally never use. You refresh, you wait, you finally get through, the tickets you want are already gone. They are there, they are already being resold at three times the price by a scalper. It is one of the most frustrating experiences in music today. It's frustrating for fans. It's frustrating for artists, too, who look out at a crowd and wonder, "Are the fans who built my career actually here?" Thanks, Joe. thanks joe We have all experienced it. we have all experienced it Your favorite artist announces a tour. your favorite artist announces a tour You are desperate for tickets. you are desperate for tickets You clear your calendar. you clear your calendar You set an alarm for the moment you can buy. you set an alarm for the moment you can buy The clock strikes. the clock strikes You are in, you are ready to go, somehow you're already behind thousands of people, likely also including bots and scalpers planning to buy tickets that they will personally never use. you are in you are ready to go somehow you're already behind thousands of people likely also including bots and scalpers planning to buy tickets that they will personally never use You refresh, you wait, you finally get through, the tickets you want are already gone. you refresh you wait you finally get through the tickets you want are already gone They are there, they are already being resold at three times the price by a scalper. they are there they are already being resold at three times the price by a scalper It is one of the most frustrating experiences in music today. it is one of the most frustrating experiences in music today It's frustrating for fans. it's frustrating for fans It's frustrating for artists, too, who look out at a crowd and wonder, "Are the fans who built my career actually here?" it's frustrating for artists too who look out at a crowd and wonder "are the fans who built my career actually here?" The tragic irony here is that the most dedicated fans are too often the ones that don't make it into the room. That is deeply unfair. It has been unfair for far too long. Today, that changes. Spotify is proud to introduce Reserved. For the first time, an artist's most dedicated fans on Spotify Premium will have two tickets held just for them before they go on sale to the general public. No racing bots, no chasing around online for pre-sale codes, just two tickets held for you. Why? Because you've earned them. Here is how Reserved works. We don't just look at streams. We look at everything. Streams, yes, but also saves, how deep you go into an artist catalog, how you engage with an artist across the entire Spotify experience. The tragic irony here is that the most dedicated fans are too often the ones that don't make it into the room. the tragic irony here is that the most dedicated fans are too often the ones that don't make it into the room That is deeply unfair. that is deeply unfair It has been unfair for far too long. it has been unfair for far too long Today, that changes. today that changes Spotify is proud to introduce Reserved. spotify is proud to introduce reserved For the first time, an artist's most dedicated fans on Spotify Premium will have two tickets held just for them before they go on sale to the general public. for the first time an artist's most dedicated fans on spotify premium will have two tickets held just for them before they go on sale to the general public No racing bots, no chasing around online for pre-sale codes, just two tickets held for you. no racing bots no chasing around online for pre-sale codes just two tickets held for you Why? why Because you've earned them. because you've earned them Here is how Reserved works. here is how reserved works We don't just look at streams. we don't just look at streams We look at everything. we look at everything Streams, yes, but also saves, how deep you go into an artist catalog, how you engage with an artist across the entire Spotify experience. streams yes but also saves how deep you go into an artist catalog how you engage with an artist across the entire spotify experience The full picture of what it means to be a true fan. If you're selected, Spotify holds two tickets for you. Actually puts them aside. You'll then have a dedicated window of time to buy before the general public rush. One tap and we guide you directly to our ticketing partner to complete your purchase. Only Spotify can pull this off. Here's why. First, verified humans. Our premium subscribers are real paying fans. Not bots, not brokers. Second, we know who the diehards are. Nearly two decades of listening data across hundreds of millions of users means that we can identify true fandom at a depth that no one else can come close to. Third, we have the scale to make this really meaningful for artists. The full picture of what it means to be a true fan. the full picture of what it means to be a true fan If you're selected, Spotify holds two tickets for you. if you're selected spotify holds two tickets for you Actually puts them aside. actually puts them aside You'll then have a dedicated window of time to buy before the general public rush. you'll then have a dedicated window of time to buy before the general public rush One tap and we guide you directly to our ticketing partner to complete your purchase. one tap and we guide you directly to our ticketing partner to complete your purchase Only Spotify can pull this off. only spotify can pull this off Here's why. here's why First, verified humans. first verified humans Our premium subscribers are real paying fans. our premium subscribers are real paying fans Not bots, not brokers. not bots not brokers Second, we know who the diehards are. second we know who the diehards are Nearly two decades of listening data across hundreds of millions of users means that we can identify true fandom at a depth that no one else can come close to. nearly two decades of listening data across hundreds of millions of users means that we can identify true fandom at a depth that no one else can come close to Third, we have the scale to make this really meaningful for artists. third we have the scale to make this really meaningful for artists Spotify has millions of verified super fans ready, more than enough to fill every reserve seat on any given tour many times over. We've already proven it. We've been quietly building towards this moment for years. Having worked with more than 40 ticketing partners and driving more than EUR 1.5 billion in ticket sales to date. Reserved is the evolution of that work. This summer, Reserved arrives with Live Nation as our launch partner in a multi-year agreement. Spotify is the exclusive audio streaming service offering this type of Reserved access to Live Nation tickets. We will help fans get access to many of the most anticipated tours in the U.S., with more markets coming fast. Reserved is one of the most substantial improvements to Spotify Premium since the founding of the company. This is just the beginning. Spotify has millions of verified super fans ready, more than enough to fill every reserve seat on any given tour many times over. spotify has millions of verified super fans ready more than enough to fill every reserve seat on any given tour many times over We've already proven it. we've already proven it We've been quietly building towards this moment for years. we've been quietly building towards this moment for years Having worked with more than 40 ticketing partners and driving more than EUR 1.5 billion in ticket sales to date. having worked with more than 40 ticketing partners and driving more than eur 1.5 billion in ticket sales to date Reserved is the evolution of that work. reserved is the evolution of that work This summer, Reserved arrives with Live Nation as our launch partner in a multi-year agreement. this summer reserved arrives with live nation as our launch partner in a multi-year agreement Spotify is the exclusive audio streaming service offering this type of Reserved access to Live Nation tickets. spotify is the exclusive audio streaming service offering this type of reserved access to live nation tickets We will help fans get access to many of the most anticipated tours in the U.S., with more markets coming fast. we will help fans get access to many of the most anticipated tours in the u.s with more markets coming fast Reserved is one of the most substantial improvements to Spotify Premium since the founding of the company. reserved is one of the most substantial improvements to spotify premium since the founding of the company This is just the beginning. this is just the beginning We see clear opportunities over time to expand the experience in ways that creates even more value for fans, for artists, and for Spotify alike. Every streaming service has the same music, but Reserved is something that only Spotify can offer, and that changes what it means to be a subscriber. Up next, Roman and Maya dive into podcasts. We see clear opportunities over time to expand the experience in ways that creates even more value for fans, for artists, and for Spotify alike. we see clear opportunities over time to expand the experience in ways that creates even more value for fans for artists and for spotify alike Every streaming service has the same music, but Reserved is something that only Spotify can offer, and that changes what it means to be a subscriber. every streaming service has the same music but reserved is something that only spotify can offer and that changes what it means to be a subscriber Up next, Roman and Maya dive into podcasts. up next roman and maya dive into podcasts

Speaker 20: Thank you, Rene. Four years ago at Investor Day, there were some significant questions around the business model behind podcasts. Our podcast business was a highly negative business and a drag on overall company margin. Today, podcasts are on their second year of profitability, and growth is accelerating. From here, we see a path to 40% margins in the long term. Strengthening economics goes hand in hand with user value. In fact, podcast engagement has doubled since we last met. In our mature podcast markets, over 40% of Premium users listen and watch every month. This is the advantage of moving first. We made a bet on podcasts and the amazing creators behind them, and we did it years before most saw the opportunity. Today, Spotify is the R&D engine of podcasts. Thank you, Rene. thank you rene Four years ago at Investor Day, there were some significant questions around the business model behind podcasts. four years ago at investor day there were some significant questions around the business model behind podcasts Our podcast business was a highly negative business and a drag on overall company margin. our podcast business was a highly negative business and a drag on overall company margin Today, podcasts are on their second year of profitability, and growth is accelerating. today podcasts are on their second year of profitability and growth is accelerating From here, we see a path to 40% margins in the long term. from here we see a path to 40% margins in the long term Strengthening economics goes hand in hand with user value. strengthening economics goes hand in hand with user value In fact, podcast engagement has doubled since we last met. in fact podcast engagement has doubled since we last met In our mature podcast markets, over 40% of Premium users listen and watch every month. in our mature podcast markets over 40% of premium users listen and watch every month This is the advantage of moving first. this is the advantage of moving first We made a bet on podcasts and the amazing creators behind them, and we did it years before most saw the opportunity. we made a bet on podcasts and the amazing creators behind them and we did it years before most saw the opportunity Today, Spotify is the R&D engine of podcasts. today spotify is the r&d engine of podcasts We made the investments, we built the tools, and the outcome is clear. We've contributed more than EUR 10 billion to the podcast industry in the last five years. The reason we can drive that much value back to the industry is simple. We are the only platform that operates at three layers. Number one, we are a leading consumer platform for podcasts. By bringing podcasts into the core Spotify experience, we drive meaningful incremental value. We deepen habits, and that directly drives retention. Premium users who stream audio podcasts in addition to music are spending three more days on Spotify each month. Users who stream video podcasts spend one more day on top of that. Number two, as a premium publisher, we're scaling our advertising business by leveraging deep engagement. We made the investments, we built the tools, and the outcome is clear. we made the investments we built the tools and the outcome is clear We've contributed more than EUR 10 billion to the podcast industry in the last five years. we've contributed more than eur 10 billion to the podcast industry in the last five years The reason we can drive that much value back to the industry is simple. the reason we can drive that much value back to the industry is simple We are the only platform that operates at three layers. we are the only platform that operates at three layers Number one, we are a leading consumer platform for podcasts. number one we are a leading consumer platform for podcasts By bringing podcasts into the core Spotify experience, we drive meaningful incremental value. by bringing podcasts into the core spotify experience we drive meaningful incremental value We deepen habits, and that directly drives retention. we deepen habits and that directly drives retention Premium users who stream audio podcasts in addition to music are spending three more days on Spotify each month. premium users who stream audio podcasts in addition to music are spending three more days on spotify each month Users who stream video podcasts spend one more day on top of that. users who stream video podcasts spend one more day on top of that Number two, as a premium publisher, we're scaling our advertising business by leveraging deep engagement. number two as a premium publisher we're scaling our advertising business by leveraging deep engagement Sponsorships, our fastest-growing format, are up over 100% year-over-year. We're unlocking a huge commercial opportunity with the ability to insert those sponsorships dynamically. Our new creator sponsorships product allows shows to monetize up to 50% more inventory by providing better tools to schedule, replace, and analyze their supply. Ultimately, this drives higher revenue while reducing the overall ad load, creating a better listening experience for users, and helping each advertising partner stand out more clearly. Number 3, we're building the most effective tools for creators. The Spotify Audience Network and the Spotify Partner Program create a unified foundation for monetization across platforms. Our Distribution API enables more than 1.5 million shows to bring video to Spotify while keeping their existing hosting providers. Sponsorships, our fastest-growing format, are up over 100% year-over-year. sponsorships our fastest-growing format are up over 100% year-over-year We're unlocking a huge commercial opportunity with the ability to insert those sponsorships dynamically. we're unlocking a huge commercial opportunity with the ability to insert those sponsorships dynamically Our new creator sponsorships product allows shows to monetize up to 50% more inventory by providing better tools to schedule, replace, and analyze their supply. our new creator sponsorships product allows shows to monetize up to 50% more inventory by providing better tools to schedule replace and analyze their supply Ultimately, this drives higher revenue while reducing the overall ad load, creating a better listening experience for users, and helping each advertising partner stand out more clearly. ultimately this drives higher revenue while reducing the overall ad load creating a better listening experience for users and helping each advertising partner stand out more clearly Number 3, we're building the most effective tools for creators. number 3 we're building the most effective tools for creators The Spotify Audience Network and the Spotify Partner Program create a unified foundation for monetization across platforms. the spotify audience network and the spotify partner program create a unified foundation for monetization across platforms Our Distribution API enables more than 1.5 million shows to bring video to Spotify while keeping their existing hosting providers. our distribution api enables more than 1.5 million shows to bring video to spotify while keeping their existing hosting providers Later this summer, we're taking the next step by introducing memberships, a set of tools that allow eligible creators to offer subscriptions directly to their most dedicated fans on Spotify. Alex and Gustav have talked about add-ons. This will bring the model to podcasts. Passionate fans unlock deeper experiences, and fandom becomes recurring revenue. What makes our approach different is that we're not sitting between creators and their audience. Creators own the relationship. They have direct access to their subscribers with the ability to import and export across platforms. For those who choose to manage subscriptions elsewhere, Spotify Open Access remains our open offering, allowing creators to distribute gated content on Spotify while using any of our partners. Everything we do is powered by world-class talent. Later this summer, we're taking the next step by introducing memberships, a set of tools that allow eligible creators to offer subscriptions directly to their most dedicated fans on Spotify. later this summer we're taking the next step by introducing memberships a set of tools that allow eligible creators to offer subscriptions directly to their most dedicated fans on spotify Alex and Gustav have talked about add-ons. alex and gustav have talked about add-ons This will bring the model to podcasts. this will bring the model to podcasts Passionate fans unlock deeper experiences, and fandom becomes recurring revenue. passionate fans unlock deeper experiences and fandom becomes recurring revenue What makes our approach different is that we're not sitting between creators and their audience. what makes our approach different is that we're not sitting between creators and their audience Creators own the relationship. creators own the relationship They have direct access to their subscribers with the ability to import and export across platforms. they have direct access to their subscribers with the ability to import and export across platforms For those who choose to manage subscriptions elsewhere, Spotify Open Access remains our open offering, allowing creators to distribute gated content on Spotify while using any of our partners. for those who choose to manage subscriptions elsewhere spotify open access remains our open offering allowing creators to distribute gated content on spotify while using any of our partners Everything we do is powered by world-class talent. everything we do is powered by world-class talent "The Ringer" continues to define the category with authority and taste. Bill Simmons remains one of the most iconic voices in sports and culture, whether it be his shows or sold-out live events. Amy Poehler's "Good Hang" won the first-ever Golden Globe for Best Podcast. In fact, for those of you in the room, you can check it out right there. The Joe Rogan Experience" tops Spotify Wrapped year after year. Wherever a creator builds, we give them the tools to grow. If creators win, we win. Next up, Maya will show you how the product drives the next phase. "The Ringer" continues to define the category with authority and taste. "the ringer" continues to define the category with authority and taste Bill Simmons remains one of the most iconic voices in sports and culture, whether it be his shows or sold-out live events. bill simmons remains one of the most iconic voices in sports and culture whether it be his shows or sold-out live events Amy Poehler's "Good Hang" won the first-ever Golden Globe for Best Podcast. amy poehler's "good hang" won the first-ever golden globe for best podcast In fact, for those of you in the room, you can check it out right there. in fact for those of you in the room you can check it out right there The Joe Rogan Experience" tops Spotify Wrapped year after year. the joe rogan experience" tops spotify wrapped year after year Wherever a creator builds, we give them the tools to grow. wherever a creator builds we give them the tools to grow If creators win, we win. if creators win we win Next up, Maya will show you how the product drives the next phase. next up maya will show you how the product drives the next phase

Speaker 11: Thank you, Roman. For us, the future of podcasts on Spotify is all about making them easier to find, easier to use, and more valuable to the user and creator. Let me show you how we're building that. Let's start with video. As you heard earlier, more than 500 million users have streamed a video podcast on Spotify, up nearly 50% year-over-year. This growth reflects how video expands the format. It gives creators a richer way to connect with their audiences and gives users a more immersive way to experience the shows they already love. Across both video and audio, we've been focused on making the podcast experience on Spotify more intuitive and more interactive. Transcripts make the catalog searchable. Automatic chapters take you straight to the moments that matter. Thank you, Roman. thank you roman For us, the future of podcasts on Spotify is all about making them easier to find, easier to use, and more valuable to the user and creator. for us the future of podcasts on spotify is all about making them easier to find easier to use and more valuable to the user and creator Let me show you how we're building that. let me show you how we're building that Let's start with video. let's start with video As you heard earlier, more than 500 million users have streamed a video podcast on Spotify, up nearly 50% year-over-year. as you heard earlier more than 500 million users have streamed a video podcast on spotify up nearly 50% year-over-year This growth reflects how video expands the format. this growth reflects how video expands the format It gives creators a richer way to connect with their audiences and gives users a more immersive way to experience the shows they already love. it gives creators a richer way to connect with their audiences and gives users a more immersive way to experience the shows they already love Across both video and audio, we've been focused on making the podcast experience on Spotify more intuitive and more interactive. Transcripts make the catalog searchable. across both video and audio we've been focused on making the podcast experience on spotify more intuitive and more interactive. transcripts make the catalog searchable Automatic chapters take you straight to the moments that matter. automatic chapters take you straight to the moments that matter Now you can also ask questions about anything you hear and get answers in real time without leaving the experience. It's an amazing way to engage with podcasts, letting you go further on any topic the moment something sparks your curiosity. Imagine you're listening to your favorite podcast about music history. They mention something that catches your attention, but then they just move on. Now, you can just ask, "Wait, what music video did Spike Jonze direct?" Because Spotify understands what you're listening to, it doesn't just answer the question. It picks up the exact moment in the episode and gives you the answer in context. Then it goes a step further, linking you to other songs with videos he's directed so you can keep exploring without breaking your flow. That leads to the next piece, discovery. Now you can also ask questions about anything you hear and get answers in real time without leaving the experience. now you can also ask questions about anything you hear and get answers in real time without leaving the experience It's an amazing way to engage with podcasts, letting you go further on any topic the moment something sparks your curiosity. it's an amazing way to engage with podcasts letting you go further on any topic the moment something sparks your curiosity Imagine you're listening to your favorite podcast about music history. imagine you're listening to your favorite podcast about music history They mention something that catches your attention, but then they just move on. they mention something that catches your attention but then they just move on Now, you can just ask, "Wait, what music video did Spike Jonze direct?" Because Spotify understands what you're listening to, it doesn't just answer the question. now you can just ask "wait what music video did spike jonze direct?" because spotify understands what you're listening to it doesn't just answer the question It picks up the exact moment in the episode and gives you the answer in context. it picks up the exact moment in the episode and gives you the answer in context Then it goes a step further, linking you to other songs with videos he's directed so you can keep exploring without breaking your flow. then it goes a step further linking you to other songs with videos he's directed so you can keep exploring without breaking your flow That leads to the next piece, discovery. that leads to the next piece discovery My favorite example is Prompted Playlist, which we recently expanded to podcasts. You write a simple prompt like, "Find me interviews with authors whose books recently got made into movies," and you get a completely personalized list of episodes. What we're seeing is that more than 50% of listeners who use Prompted Playlist discover a new show. That's another signal of how powerful personalization can be. The next step is building a podcast experience made just for you, one that hasn't existed before and couldn't exist at scale until now. We're already seeing the demand for this. Some users have started creating custom audio using their own agents, and when we introduced the ability to save those episodes to Spotify, the response exceeded our expectations. Today, this is still a very manual and technical process. My favorite example is Prompted Playlist, which we recently expanded to podcasts. my favorite example is prompted playlist which we recently expanded to podcasts You write a simple prompt like, "Find me interviews with authors whose books recently got made into movies," and you get a completely personalized list of episodes. you write a simple prompt like "find me interviews with authors whose books recently got made into movies," and you get a completely personalized list of episodes What we're seeing is that more than 50% of listeners who use Prompted Playlist discover a new show. what we're seeing is that more than 50% of listeners who use prompted playlist discover a new show That's another signal of how powerful personalization can be. that's another signal of how powerful personalization can be The next step is building a podcast experience made just for you, one that hasn't existed before and couldn't exist at scale until now. the next step is building a podcast experience made just for you one that hasn't existed before and couldn't exist at scale until now We're already seeing the demand for this. we're already seeing the demand for this Some users have started creating custom audio using their own agents, and when we introduced the ability to save those episodes to Spotify, the response exceeded our expectations. some users have started creating custom audio using their own agents and when we introduced the ability to save those episodes to spotify the response exceeded our expectations Today, this is still a very manual and technical process. today this is still a very manual and technical process We're making it easy for users to create personal podcasts right inside Spotify. Just like with Prompted Playlist, all you'll need to do is write a prompt, and we'll generate short, personalized, private audio based on your input. It draws on world knowledge, your Spotify Taste Profile, and any additional context you import to create something that's relevant, dynamic, and shaped just for you. Here's my daily briefing as an example. I live in the Hudson Valley. I'm interested in what's going on in my area and the top tech headlines. This morning, it opened with a quick update on the new AI release that everyone's talking about. It flagged an artist I've been listening to that's playing right near me this weekend. We're making it easy for users to create personal podcasts right inside Spotify. we're making it easy for users to create personal podcasts right inside spotify Just like with Prompted Playlist, all you'll need to do is write a prompt, and we'll generate short, personalized, private audio based on your input. just like with prompted playlist all you'll need to do is write a prompt and we'll generate short personalized private audio based on your input It draws on world knowledge, your Spotify Taste Profile, and any additional context you import to create something that's relevant, dynamic, and shaped just for you. it draws on world knowledge your spotify taste profile and any additional context you import to create something that's relevant dynamic and shaped just for you Here's my daily briefing as an example. here's my daily briefing as an example I live in the Hudson Valley. i live in the hudson valley I'm interested in what's going on in my area and the top tech headlines. i'm interested in what's going on in my area and the top tech headlines This morning, it opened with a quick update on the new AI release that everyone's talking about. this morning it opened with a quick update on the new ai release that everyone's talking about It flagged an artist I've been listening to that's playing right near me this weekend. it flagged an artist i've been listening to that's playing right near me this weekend It even pulled in a podcast episode from a show I hadn't discovered yet but was exactly in my wheelhouse. Another way I love to use this feature is to prepare me for the workday ahead. The other day, I had a meeting with a few of our podcast partners to get their feedback on a new feature. I uploaded a doc with details about the update and some notes from the last time we met, and Spotify made me a personal podcast summarizing their feedback from last time, predicting some questions they'd have this time, and it even gave me some headlines about their recent episodes, so I'd have some talking points. It even pulled in a podcast episode from a show I hadn't discovered yet but was exactly in my wheelhouse. it even pulled in a podcast episode from a show i hadn't discovered yet but was exactly in my wheelhouse Another way I love to use this feature is to prepare me for the workday ahead. another way i love to use this feature is to prepare me for the workday ahead The other day, I had a meeting with a few of our podcast partners to get their feedback on a new feature. the other day i had a meeting with a few of our podcast partners to get their feedback on a new feature I uploaded a doc with details about the update and some notes from the last time we met, and Spotify made me a personal podcast summarizing their feedback from last time, predicting some questions they'd have this time, and it even gave me some headlines about their recent episodes, so I'd have some talking points. i uploaded a doc with details about the update and some notes from the last time we met and spotify made me a personal podcast summarizing their feedback from last time predicting some questions they'd have this time and it even gave me some headlines about their recent episodes so i'd have some talking points This saved me a ton of time and let me head into the meeting with everything I needed with a really short, convenient summary to listen to on my commute. Just like the monthly allowance of hours we provide for audiobooks listening, all Premium users will have a monthly allocation of credits to generate podcasts included with their subscription. Power users who want to be able to do more with personal podcasts will be able to purchase additional credits for more inference. Speaking of power users, let's talk about fitness. This is a behavior that already lives across music and podcasts and video. Spotify has the audience, the personalization engine, and the daily contextual relationship to make that behavior more valuable over time. This saved me a ton of time and let me head into the meeting with everything I needed with a really short, convenient summary to listen to on my commute. this saved me a ton of time and let me head into the meeting with everything i needed with a really short convenient summary to listen to on my commute Just like the monthly allowance of hours we provide for audiobooks listening, all Premium users will have a monthly allocation of credits to generate podcasts included with their subscription. just like the monthly allowance of hours we provide for audiobooks listening all premium users will have a monthly allocation of credits to generate podcasts included with their subscription Power users who want to be able to do more with personal podcasts will be able to purchase additional credits for more inference. power users who want to be able to do more with personal podcasts will be able to purchase additional credits for more inference Speaking of power users, let's talk about fitness. speaking of power users let's talk about fitness This is a behavior that already lives across music and podcasts and video. this is a behavior that already lives across music and podcasts and video Spotify has the audience, the personalization engine, and the daily contextual relationship to make that behavior more valuable over time. spotify has the audience the personalization engine and the daily contextual relationship to make that behavior more valuable over time We've been the soundtrack to people's workouts for almost 20 years. Now, through our Peloton partnership, Premium users have access to more than 1,400 workout videos. In just the first four weeks, we're already seeing strong engagement. It turns out people don't just want to follow workouts, they want to shape them. We're making that possible very soon with guided adaptive running sessions. You can prompt something like, "Give me a playlist for a 30-minute run at an eight-minute pace," and Spotify will select tracks in your taste, stretch them to the exact right tempo, seamlessly mix transitions between the tracks, and layer in coaching cues to guide you through your run. We see significant potential to build more experiences tailored to fitness enthusiasts, and that's how we think about the all-day user. We've been the soundtrack to people's workouts for almost 20 years. we've been the soundtrack to people's workouts for almost 20 years Now, through our Peloton partnership, Premium users have access to more than 1,400 workout videos. now through our peloton partnership premium users have access to more than 1,400 workout videos In just the first four weeks, we're already seeing strong engagement. in just the first four weeks we're already seeing strong engagement It turns out people don't just want to follow workouts, they want to shape them. it turns out people don't just want to follow workouts they want to shape them We're making that possible very soon with guided adaptive running sessions. we're making that possible very soon with guided adaptive running sessions You can prompt something like, "Give me a playlist for a 30-minute run at an eight-minute pace," and Spotify will select tracks in your taste, stretch them to the exact right tempo, seamlessly mix transitions between the tracks, and layer in coaching cues to guide you through your run. you can prompt something like "give me a playlist for a 30-minute run at an eight-minute pace," and spotify will select tracks in your taste stretch them to the exact right tempo seamlessly mix transitions between the tracks and layer in coaching cues to guide you through your run We see significant potential to build more experiences tailored to fitness enthusiasts, and that's how we think about the all-day user. we see significant potential to build more experiences tailored to fitness enthusiasts and that's how we think about the all-day user Someone who turns to Spotify across more moments, more use cases, and more parts of their daily life. Let's turn the page to the one audience at Spotify that's more engaged than podcast listeners. Here's Owen. Thank you. Someone who turns to Spotify across more moments, more use cases, and more parts of their daily life. someone who turns to spotify across more moments more use cases and more parts of their daily life Let's turn the page to the one audience at Spotify that's more engaged than podcast listeners. let's turn the page to the one audience at spotify that's more engaged than podcast listeners Here's Owen. here's owen Thank you. thank you

Speaker 17: Thank you, Maya. As Maya mentioned, when someone adds a book habit to their existing podcast and music listening, they become part of the most engaged audience on the whole of Spotify. This additional engagement, it is important because books are some of the most meaningful time well spent. Books, they inform us, they educate us, and of course, they entertain us as well. This makes them fit naturally on Spotify. Just two years ago, we entered a EUR 10 billion global audiobook market that was underserved by the existing players. Since then, we have expanded to 22 markets, bringing audiobooks to tens of millions of new listeners. What matters most is how we have approached this category. Thank you, Maya. thank you maya As Maya mentioned, when someone adds a book habit to their existing podcast and music listening, they become part of the most engaged audience on the whole of Spotify. as maya mentioned when someone adds a book habit to their existing podcast and music listening they become part of the most engaged audience on the whole of spotify This additional engagement, it is important because books are some of the most meaningful time well spent. Books, they inform us, they educate us, and of course, they entertain us as well. this additional engagement it is important because books are some of the most meaningful time well spent. books they inform us they educate us and of course they entertain us as well This makes them fit naturally on Spotify. this makes them fit naturally on spotify Just two years ago, we entered a EUR 10 billion global audiobook market that was underserved by the existing players. just two years ago we entered a eur 10 billion global audiobook market that was underserved by the existing players Since then, we have expanded to 22 markets, bringing audiobooks to tens of millions of new listeners. since then we have expanded to 22 markets bringing audiobooks to tens of millions of new listeners What matters most is how we have approached this category. what matters most is how we have approached this category A credit-based model does not allow every book to find an audience, so we introduced an hourly consumption model that unlocks discovery across a much broader range of titles, especially shorter formats such as poetry or children's books. As a result, our already sizable audience of younger readers and families continues to grow as more people explore the kids and family catalog that we keep investing in. As a new father, this is really top of mind for me. At the same time, we've scaled the catalog from 150,000 titles at launch to more than 700,000 titles today. It's a huge catalog to explore. We've opened up the ecosystem with many English language publishers moving away from exclusive deals to reach broader audiences through Spotify for the very first time. A credit-based model does not allow every book to find an audience, so we introduced an hourly consumption model that unlocks discovery across a much broader range of titles, especially shorter formats such as poetry or children's books. a credit-based model does not allow every book to find an audience so we introduced an hourly consumption model that unlocks discovery across a much broader range of titles especially shorter formats such as poetry or children's books As a result, our already sizable audience of younger readers and families continues to grow as more people explore the kids and family catalog that we keep investing in. as a result our already sizable audience of younger readers and families continues to grow as more people explore the kids and family catalog that we keep investing in As a new father, this is really top of mind for me. as a new father this is really top of mind for me At the same time, we've scaled the catalog from 150,000 titles at launch to more than 700,000 titles today. at the same time we've scaled the catalog from 150,000 titles at launch to more than 700,000 titles today It's a huge catalog to explore. it's a huge catalog to explore We've opened up the ecosystem with many English language publishers moving away from exclusive deals to reach broader audiences through Spotify for the very first time. we've opened up the ecosystem with many english language publishers moving away from exclusive deals to reach broader audiences through spotify for the very first time We've introduced industry-first experiences like Page Match and audiobook recaps, redefining how people discover, navigate, and return to books. Just like in music, when we lead, the rest of the industry follows. In a short period of time, we've established ourselves as a major force, driving where this category is headed. What's become increasingly clear is that the industry has been waiting for a platform like Spotify, a platform that can connect formats, a platform that reduces friction, and that can bring entirely new audiences into books. We're just getting started. We see significant opportunity ahead, and we're going to keep growing the books experience for listeners, for authors, and for publishers all around the world. All of this is positioning Spotify to become the home for all books. We've introduced industry-first experiences like Page Match and audiobook recaps, redefining how people discover, navigate, and return to books. we've introduced industry-first experiences like page match and audiobook recaps redefining how people discover navigate and return to books Just like in music, when we lead, the rest of the industry follows. just like in music when we lead the rest of the industry follows In a short period of time, we've established ourselves as a major force, driving where this category is headed. in a short period of time we've established ourselves as a major force driving where this category is headed What's become increasingly clear is that the industry has been waiting for a platform like Spotify, a platform that can connect formats, a platform that reduces friction, and that can bring entirely new audiences into books. what's become increasingly clear is that the industry has been waiting for a platform like spotify a platform that can connect formats a platform that reduces friction and that can bring entirely new audiences into books We're just getting started. we're just getting started We see significant opportunity ahead, and we're going to keep growing the books experience for listeners, for authors, and for publishers all around the world. we see significant opportunity ahead and we're going to keep growing the books experience for listeners for authors and for publishers all around the world All of this is positioning Spotify to become the home for all books. all of this is positioning spotify to become the home for all books In April, we launched print book purchases through our bookshop.org partnership because we know that many of our users, they want to go back and forth between a physical book and an audiobook. Every sale directly supports independent bookstores. We've also invested in reimagining the reading experience itself. Our feature Page Match is now available in over 30 languages, and it's been a breakout hit since launching in February. As the first experience of its kind, it lets users move seamlessly between a print or e-book and the audiobook on Spotify, and it's something I absolutely love. I'll often read the book in the evening, and then I go for a run in the morning. I just switch to the point in the audiobook, and I can take the book with me. Users are telling us the same thing. In April, we launched print book purchases through our bookshop.org partnership because we know that many of our users, they want to go back and forth between a physical book and an audiobook. in april we launched print book purchases through our bookshop.org partnership because we know that many of our users they want to go back and forth between a physical book and an audiobook Every sale directly supports independent bookstores. every sale directly supports independent bookstores We've also invested in reimagining the reading experience itself. we've also invested in reimagining the reading experience itself Our feature Page Match is now available in over 30 languages, and it's been a breakout hit since launching in February. our feature page match is now available in over 30 languages and it's been a breakout hit since launching in february As the first experience of its kind, it lets users move seamlessly between a print or e-book and the audiobook on Spotify, and it's something I absolutely love. as the first experience of its kind it lets users move seamlessly between a print or e-book and the audiobook on spotify and it's something i absolutely love I'll often rea d the book in the evening, and then I go for a run in the morning. i'll often rea d the book in the evening and then i go for a run in the morning I just switch to the point in the audiobook, and I can take the book with me. i just switch to the point in the audiobook and i can take the book with me Users are telling us the same thing. users are telling us the same thing We're seeing strong repeat engagement with users returning week after week, even as the feature scales. It's quickly become one of our most consistently used and highest-performing product launches. We've seen an uplift in listening of up to 55% over a month when readers use Page Match, and it's particularly popular with younger listeners, with the average age of a Page Match user being six years younger than the average audiobook listener. What's even better, users are finishing books twice as fast. That means users are reading more books, generating more revenue for authors, and purchasing more listening time. This is exactly the kind of multi-format behavior that we believe will define the future of books on Spotify. Even best-selling authors agree with us, so thanks Harlan for helping me make that point. We're seeing strong repeat engagement with users returning week after week, even as the feature scales. we're seeing strong repeat engagement with users returning week after week even as the feature scales It's quickly become one of our most consistently used and highest-performing product launches. it's quickly become one of our most consistently used and highest-performing product launches We've seen an uplift in listening of up to 55% over a month when readers use Page Match, and it's particularly popular with younger listeners, with the average age of a Page Match user being six years younger than the average audiobook listener. we've seen an uplift in listening of up to 55% over a month when readers use page match and it's particularly popular with younger listeners with the average age of a page match user being six years younger than the average audiobook listener What's even better, users are finishing books twice as fast. what's even better users are finishing books twice as fast That means users are reading more books, generating more revenue for authors, and purchasing more listening time. that means users are reading more books generating more revenue for authors and purchasing more listening time This is exactly the kind of multi-format behavior that we believe will define the future of books on Spotify. this is exactly the kind of multi-format behavior that we believe will define the future of books on spotify Even best-selling authors agree with us, so thanks Harlan for helping me make that point. even best-selling authors agree with us so thanks harlan for helping me make that point We're also bringing entirely new audiences into the category. Almost half of Spotify audiobook listeners are under 35, which is meaningfully younger than the broader market. The audience is roughly 50/50 male/female because we're helping publishing unlock one of its hardest-to-reach young audiences, which is men. The great news is the publishing industry is growing, and audiobooks remain the fastest-growing segment, with roughly 20%-30% annual growth in the U.S. Spotify, well, we're growing even faster than that. Listening hours grew 60% from 2024 to 2025. Almost half of audiobook consumers started listening within the last 12 months. Our indie title catalog grew 50% year-over-year. As you heard earlier, the economics are working, too. I'm happy to announce that we are on track to reach EUR 100 million in annualized recurring revenue from Audiobooks+ only this July. We're also bringing entirely new audiences into the category. we're also bringing entirely new audiences into the category Almost half of Spotify audiobook listeners are under 35, which is meaningfully younger than the broader market. almost half of spotify audiobook listeners are under 35 which is meaningfully younger than the broader market The audience is roughly 50/50 male/female because we're helping publishing unlock one of its hardest-to-reach young audiences, which is men. the audience is roughly 50/50 male/female because we're helping publishing unlock one of its hardest-to-reach young audiences which is men The great news is the publishing industry is growing, and audiobooks remain the fastest-growing segment, with roughly 20%-30% annual growth in the U.S. the great news is the publishing industry is growing and audiobooks remain the fastest-growing segment with roughly 20%-30% annual growth in the u.s Spotify, well, we're growing even faster than that. spotify well we're growing even faster than that Listening hours grew 60% from 2024 to 2025. listening hours grew 60% from 2024 to 2025 Almost half of audiobook consumers started listening within the last 12 months. almost half of audiobook consumers started listening within the last 12 months Our indie title catalog grew 50% year-over-year. our indie title catalog grew 50% year-over-year As you heard earlier, the economics are working, too. as you heard earlier the economics are working too I'm happy to announce that we are on track to reach EUR 100 million in annualized recurring revenue from Audiobooks+ only this July. i'm happy to announce that we are on track to reach eur 100 million in annualized recurring revenue from audiobooks+ only this july We're really excited about this product because Audiobooks+ users deliver multiples higher LTV than standard subscribers who listen to audiobooks. What makes this especially compelling is the user behavior underneath it. In the U.S., consumption amongst Audiobooks+ users increased 18% in the first 30 days of purchasing the additional hours. That tells us something important. This is not just another content vertical. We're creating healthy reading habits and high-value behavior that becomes even more powerful when it sits inside the broader Spotify ecosystem. The takeaway is not that this category is mature. It's that it's been underserved, and we're showing the industry what serving it well looks like. That brings me to where we go next. The model, it's straightforward. We're really excited about this product because Audiobooks+ users deliver multiples higher LTV than standard subscribers who listen to audiobooks. we're really excited about this product because audiobooks+ users deliver multiples higher ltv than standard subscribers who listen to audiobooks What makes this especially compelling is the user behavior underneath it. what makes this especially compelling is the user behavior underneath it In the U.S., consumption amongst Audiobooks+ users increased 18% in the first 30 days of purchasing the additional hours. in the u.s consumption amongst audiobooks+ users increased 18% in the first 30 days of purchasing the additional hours That tells us something important. that tells us something important This is not just another content vertical. We're creating healthy reading habits and high-value behavior that becomes even more powerful when it sits inside the broader Spotify ecosystem. this is not just another content vertical. we're creating healthy reading habits and high-value behavior that becomes even more powerful when it sits inside the broader spotify ecosystem The takeaway is not that th is category is mature. the takeaway is not that th is category is mature It's that it's been underserved, and we're showing the industry what serving it well looks like. it's that it's been underserved and we're showing the industry what serving it well looks like That brings me to where we go next. that brings me to where we go next The model, it's straightforward. the model it's straightforward Whether you're a casual listener or whether you're devouring a book every single week, we want to offer a plan that fits your life. Audiobooks and Spotify Premium builds a healthy habit of listening to books by offering great value to our subscribers and meaningful revenue for authors and publishers. Audiobooks+ drives additional revenue by monetizing heavier users. People don't stop there. Some of these users go on to purchase even more top-up hours. That's why this summer, we're expanding Audiobooks+ with new add-on tiers designed to serve every single type of reader. Like Alex said earlier, you could think of it as Audiobooks++ or Audiobooks+++, I promise you it's not going to be called that, we're going to have a much better name. Whether you're a casual listener or whether you're devouring a book every single week, we want to offer a plan that fits your life. whether you're a casual listener or whether you're devouring a book every single week we want to offer a plan that fits your life Audiobooks and Spotify Premium builds a healthy habit of listening to books by offering great value to our subscribers and meaningful revenue for authors and publishers. audiobooks and spotify premium builds a healthy habit of listening to books by offering great value to our subscribers and meaningful revenue for authors and publishers Audiobooks+ drives additional revenue by monetizing heavier users. audiobooks+ drives additional revenue by monetizing heavier users People don't stop there. people don't stop there Some of these users go on to purchase even more top-up hours. some of these users go on to purchase even more top-up hours That's why this summer, we're expanding Audiobooks+ with new add-on tiers designed to serve every single type of reader. that's why this summer we're expanding audiobooks+ with new add-on tiers designed to serve every single type of reader Like Alex said earlier, you could think of it as Audiobooks++ or Audiobooks+++, I promise you it's not going to be called that, we're going to have a much better name. like alex said earlier you could think of it as audiobooks++ or audiobooks+++ i promise you it's not going to be called that we're going to have a much better name We'll introduce a number of higher-hour plans, giving our most engaged listeners the flexibility to go deeper and to enjoy even more books. Then launching later this year, family and student plans for Audiobooks+ will bring the experience to entire households and to the next generation of readers. We're of course, building more great tools for those who fuel the books ecosystem. That is, of course, authors and publishers. Spotify for Authors provides direct access to audience data, to growth tools, and distribution. Today, we are expanding Spotify for Authors into 10 new languages, giving authors and publishers the insights and publishing tools to grow their readership now in the language that they work in. We'll introduce a number of higher-hour plans, giving our most engaged listeners the flexibility to go deeper and to enjoy even more books. we'll introduce a number of higher-hour plans giving our most engaged listeners the flexibility to go deeper and to enjoy even more books Then launching later this year, family and student plans for Audiobooks+ will bring the experience to entire households and to the next generation of readers. then launching later this year family and student plans for audiobooks+ will bring the experience to entire households and to the next generation of readers We're of course, building more great tools for those who fuel the books ecosystem. we're of course building more great tools for those who fuel the books ecosystem That is, of course, authors and publishers. that is of course authors and publishers Spotify for Authors provides direct access to audience data, to growth tools, and distribution. spotify for authors provides direct access to audience data to growth tools and distribution Today, we are expanding Spotify for Authors into 10 new languages, giving authors and publishers the insights and publishing tools to grow their readership now in the language that they work in. today we are expanding spotify for authors into 10 new languages giving authors and publishers the insights and publishing tools to grow their readership now in the language that they work in For many self-published authors, converting their book to audio in the first place can be a challenge, whether that's a financial challenge or a technical one. That's why we've already invested in publishing programs like Spotify Selects, which provides financial support to make audiobooks for the very first time. We're also rolling out publishing funds in markets like France to ensure that all stories can be heard. Now, to help bring more books to market in audio for this vital group of authors, we're introducing new audiobook creation tools. Starting in June, we are opening an invite-only beta program providing access to best-in-class digital voice technology powered by ElevenLabs. We're building this directly into Spotify for Authors, enabling seamless generation and frictionless publishing. Authors are not locked into exclusive deals. For many self-published authors, converting their book to audio in the first place can be a challenge, whether that's a financial challenge or a technical one. for many self-published authors converting their book to audio in the first place can be a challenge whether that's a financial challenge or a technical one That's why we've already invested in publishing programs like Spotify Selects, which provides financial support to make audiobooks for the very first time. that's why we've already invested in publishing programs like spotify selects which provides financial support to make audiobooks for the very first time We're also rolling out publishing funds in markets like France to ensure that all stories can be heard. we're also rolling out publishing funds in markets like france to ensure that all stories can be heard Now, to help bring more books to market in audio for this vital group of authors, we're introducing new audiobook creation tools. now to help bring more books to market in audio for this vital group of authors we're introducing new audiobook creation tools Starting in June, we are opening an invite-only beta program providing access to best-in-class digital voice technology powered by ElevenLabs. starting in june we are opening an invite-only beta program providing access to best-in-class digital voice technology powered by elevenlabs We're building this directly into Spotify for Authors, enabling seamless generation and frictionless publishing. we're building this directly into spotify for authors enabling seamless generation and frictionless publishing Authors are not locked into exclusive deals. authors are not locked into exclusive deals That means they get the widest possible audience for their books, which is incredibly important to them. I'm also excited to share that we're introducing two new features to assist with audiobook discovery. First up, if you're looking for new recommendations, you can ask a question to Spotify. You might ask, "Give me some Scandinavian noir for my upcoming work trip to Sweden." Maybe you're already deep into enjoying an audiobook, you'll then be able to ask, "What else has this author written?" "What should I listen to next?" This summer, we'll bring Prompted Playlists to audiobooks, too, giving users more control while expanding our natural language discovery experience to books for the very first time. If any of you in the room or online run a book club, this could be great for you. That means they get the widest possible audience for their books, which is incredibly important to them. that means they get the widest possible audience for their books which is incredibly important to them I'm also excited to share that we're introducing two new features to assist with audiobook discovery. i'm also excited to share that we're introducing two new features to assist with audiobook discovery First up, if you're looking for new recommendations, you can ask a question to Spotify. first up if you're looking for new recommendations you can ask a question to spotify You might ask, "Give me some Scandinavian noir for my upcoming work trip to Sweden." Maybe you're already deep into enjoying an audiobook, you'll then be able to ask, "What else has this author written?" "What should I listen to next?" This summer, we'll bring Prompted Playlists to audiobooks, too, giving users more control while expanding our natural language discovery experience to books for the very first time. you might ask "give me some scandinavian noir for my upcoming work trip to sweden." maybe you're already deep into enjoying an audiobook you'll then be able to ask "what else has this author written?" "what should i listen to next?" this summer we'll bring prompted playlists to audiobooks too giving users more control while expanding our natural language discovery experience to books for the very first time If any of you in the room or online run a book club, this could be great for you. if any of you in the room or online run a book club this could be great for you I'll give you a flavor of how it might work. You could say, "My book club loves murder mysteries by Agatha Christie or Arthur Conan Doyle," both Brits, by the way, "but we'd like a fresher take on the genre. Give me a list of modern murder mysteries similar to those classics that my book club would enjoy." We'll then create a playlist of audiobooks to fit the prompt. These features and our new plans, they all serve the same goal, which is to help people engage with books more by making the experience feel more natural, more connected, and more integrated into everyday life, all in the Spotify app that hundreds of millions of people already use every single day. Now I'll pass the mic to Katie to walk through how we've rebuilt the Spotify ads machine. I'll give you a flavor of how it might work. i'll give you a flavor of how it might work You could say, "My book club loves murder mysteries by Agatha Christie or Arthur Conan Doyle," both Brits, by the way, "but we'd like a fresher take on the genre. you could say "my book club loves murder mysteries by agatha christie or arthur conan doyle," both brits by the way "but we'd like a fresher take on the genre Give me a list of modern murder mysteries similar to those classics that my book club would enjoy." We'll then create a playlist of audiobooks to fit the prompt. give me a list of modern murder mysteries similar to those classics that my book club would enjoy." we'll then create a playlist of audiobooks to fit the prompt These features and our new plans, they all serve the same goal, which is to help people engage with books more by making the experience feel more natural, more connected, and more integrated into everyday life, all in the Spotify app that hundreds of millions of people already use every single day. these features and our new plans they all serve the same goal which is to help people engage with books more by making the experience feel more natural more connected and more integrated into everyday life all in the spotify app that hundreds of millions of people already use every single day Now I'll pass the mic to Katie to walk through how we've rebuilt the Spotify ads machine. now i'll pass the mic to katie to walk through how we've rebuilt the spotify ads machine

Speaker 10: Thanks, Owen. Our ads business is built on a simple belief: advertising should respect the user experience. It should feel relevant to the moment, and at its best, become a part of culture rather than an interruption from it. Last year at Advance, we previewed our new tools and tech, which make it simpler to buy, create, and measure. Now, the theme was automation, but the bigger idea was that our ads platform should be built for Spotify, not bolted on Spotify. Today, for the first time, it is. Our tech is now built for Spotify and the 483 million people who use our free tier. It powers advertising across music, podcasts, and video, bringing targeting, measurement, and ad delivery together in one system. Thanks, Owen. thanks owen Our ads business is built on a simple belief: advertising should respect the user experience. our ads business is built on a simple belief advertising should respect the user experience It should feel relevant to the moment, and at its best, become a part of culture rather than an interruption from it. it should feel relevant to the moment and at its best become a part of culture rather than an interruption from it Last year at Advance, we previewed our new tools and tech, which make it simpler to buy, create, and measure. last year at advance we previewed our new tools and tech which make it simpler to buy create and measure Now, the theme was automation, but the bigger idea was that our ads platform should be built for Spotify, not bolted on Spotify. now the theme was automation but the bigger idea was that our ads platform should be built for spotify not bolted on spotify Today, for the first time, it is. today for the first time it is Our tech is now built for Spotify and the 483 million people who use our free tier. It powers advertising across music, podcasts, and video, bringing targeting, measurement, and ad delivery together in one system. our tech is now built for spotify and the 483 million people who use our free tier. it powers advertising across music podcasts and video bringing targeting measurement and ad delivery together in one system Because it was custom-built for the Spotify experience, it's designed to drive outcomes for advertisers while respecting the user. Every day, we use advertising to support the free experience, introducing users to new products and features, and helping free users understand the value of Premium. We've built one of the world's largest subscription businesses by converting the users who start on our free tier. In a way, Spotify is the ultimate proof point for what our ads business can do, and we know we can drive those same results for advertisers. A few years ago, our advertising business was not where we wanted it to be. Simply put, Spotify was not set up for where the market was going. We were too dependent on direct buying, too concentrated in the U.S., and too centered on audio-only budgets. Because it was custom-built for the Spotify experience, it's designed to drive outcomes for advertisers while respecting the user. because it was custom-built for the spotify experience it's designed to drive outcomes for advertisers while respecting the user Every day, we use advertising to support the free experience, introducing users to new products and features, and helping free users understand the value of Premium. every day we use advertising to support the free experience introducing users to new products and features and helping free users understand the value of premium We've built one of the world's largest subscription businesses by converting the users who start on our fr ee tier. we've built one of the world's largest subscription businesses by converting the users who start on our fr ee tier In a way, Spotify is the ultimate proof point for what our ads business can do, and we know we can drive those same results for advertisers. in a way spotify is the ultimate proof point for what our ads business can do and we know we can drive those same results for advertisers A few years ago, our advertising business was not where we wanted it to be. a few years ago our advertising business was not where we wanted it to be Simply put, Spotify was not set up for where the market was going. simply put spotify was not set up for where the market was going We were too dependent on direct buying, too concentrated in the U.S., and too centered on audio-only budgets. we were too dependent on direct buying too concentrated in the u.s and too centered on audio-only budgets At the same time, marketers were moving toward automated performance-based buying. Advertisers wanted measurable proof that their investments were paying off. We're the first to admit it took us too long to make the shift. The good news is we understood the assignment. We accelerated the pivot and stopped treating culture and performance as a trade-off. Instead, we doubled down on building for both. Now, we have high-impact sponsorships where the world's biggest brands tap into Spotify's role at the heart of culture and fandom. We also have scaled biddable, where advertisers can access Spotify through self-serve and programmatic channels with the automation, measurement, and performance tools they expect. Together, these engines unlock TAM by attracting ad partners who want custom partnerships, outcome-focused performance, or ideally, both. We've dramatically expanded our potential upside. At the same time, marketers were moving toward automated performance-based buying. at the same time marketers were moving toward automated performance-based buying Advertisers wanted measurable proof that their investments were paying off. advertisers wanted measurable proof that their investments were paying off We're the first to admit it took us too long to make the shift. we're the first to admit it took us too long to make the shift The good news is we understood the assignment. the good news is we understood the assignment We accelerated the pivot and stopped treating culture and performance as a trade-off. we accelerated the pivot and stopped treating culture and performance as a trade-off Instead, we doubled down on building for both. instead we doubled down on building for both Now, we have high-impact sponsorships where the world's biggest brands tap into Spotify's role at the heart of culture and fandom. now we have high-impact sponsorships where the world's biggest brands tap into spotify's role at the heart of culture and fandom We also have scaled biddable, where advertisers can access Spotify through self-serve and programmatic channels with the automation, measurement, and performance tools they expect. we also have scaled biddable where advertisers can access spotify through self-serve and programmatic channels with the automation measurement and performance tools they expect Together, these engines unlock TAM by attracting ad partners who want custom partnerships, outcome-focused performance, or ideally, both. together these engines unlock tam by attracting ad partners who want custom partnerships outcome-focused performance or ideally both We've dramatically expanded our potential upside. we've dramatically expanded our potential upside Let me explain why we're so confident in this plan. We're already seeing the early results of our investments. Our biddable channels have grown to more than a third of our ads business. We now operate one of the world's largest global audio ad exchanges. Spotify Ads Manager gives advertisers a first-party path into Spotify, while the Ad Exchange gives programmatic buyers access to our audience through the platforms they already use. By the numbers, active advertisers grew 68% year-over-year in Q1, including through the holidays and into the spring, a strong trend that we expect to continue. The growth is also becoming more global. In Q1, EMEA grew nearly 10% year-over-year. LATAM grew 25% year-over-year. That matters because Spotify is not just a global audience. Let me explain why we're so confident in this plan. let me explain why we're so confident in this plan We're already seeing the early results of our investments. we're already seeing the early results of our investments Our biddable channels have grown to more than a third of our ads business. our biddable channels have grown to more than a third of our ads business We now operate one of the world's largest global audio ad exchanges. we now operate one of the world's largest global audio ad exchanges Spotify Ads Manager gives advertisers a first-party path into Spotify, while the Ad Exchange gives programmatic buyers access to our audience through the platforms they already use. spotify ads manager gives advertisers a first-party path into spotify while the ad exchange gives programmatic buyers access to our audience through the platforms they already use By the numbers, active advertisers grew 68% year-over-year in Q1, including through the holidays and into the spring, a strong trend that we expect to continue. by the numbers active advertisers grew 68% year-over-year in q1 including through the holidays and into the spring a strong trend that we expect to continue The growth is also becoming more global. the growth is also becoming more global In Q1, EMEA grew nearly 10% year-over-year. in q1 emea grew nearly 10% year-over-year LATAM grew 25% year-over-year. latam grew 25% year-over-year That matters because Spotify is not just a global audience. that matters because spotify is not just a global audience We are becoming a global ads business. That's crucial for two key reasons. First, more advertisers give us the opportunity to drive price improvements over time. Second, it also means that we are able to more effectively deliver personalized ads to our users. Now, our sponsorship business is also growing. As Roman shared earlier, podcast sponsorship revenue more than doubled year-over-year, showing the power of connecting top creators, deeply engaged audiences, and brands in the moments that matter most. Our direct business is becoming higher impact while our biddable business is scaling demand. The heavy platform rebuild is now behind us, and our focus forward is on accelerating revenue growth and continuing to improve innovation. The first priority is further growing the market for Spotify. We are becoming a global ads business. we are becoming a global ads business That's crucial for two key reasons. that's crucial for two key reasons First, more advertisers give us the opportunity to drive price improvements over time. first more advertisers give us the opportunity to drive price improvements over time Second, it also means that we are able to more effectively deliver personalized ads to our users. second it also means that we are able to more effectively deliver personalized ads to our users Now, our sponsorship business is also growing. now our sponsorship business is also growing As Roman shared earlier, podcast sponsorship revenue more than doubled year-over-year, showing the power of connecting top creators, deeply engaged audiences, and brands in the moments that matter most. as roman shared earlier podcast sponsorship revenue more than doubled year-over-year showing the power of connecting top creators deeply engaged audiences and brands in the moments that matter most Our direct business is becoming higher impact while our biddable business is scaling demand. our direct business is becoming higher impact while our biddable business is scaling demand The heavy platform rebuild is now behind us, and our focus forward is on accelerating revenue growth and continuing to improve innovation. the heavy platform rebuild is now behind us and our focus forward is on accelerating revenue growth and continuing to improve innovation The first priority is further growing the market for Spotify. the first priority is further growing the market for spotify We're a category leader in audio for advertisers, and we know that ears can be just as powerful as eyes when it comes to driving successful results through advertising. Our new measurement capabilities allow us to clearly demonstrate that. As we further diversify our video offerings, we will capitalize on growing those opportunities. The new engine of sponsorships and biddable is now running. The second priority is leveraging AI to make our tools even more powerful, taking Spotify's Ads offering to the next level. AI reduces one of the biggest barriers to audio advertising, which is the audio, the creative itself. Roughly 70% of the ads we create for our partners in Spotify Ads Manager are built using AI tools, and we're already seeing the economic benefit of reducing the costs of creative production. We're a category leader in audio for advertisers, and we know that ears can be just as powerful as eyes when it comes to driving successful results through advertising. we're a category leader in audio for advertisers and we know that ears can be just as powerful as eyes when it comes to driving successful results through advertising Our new measurement capabilities allow us to clearly demonstrate that. our new measurement capabilities allow us to clearly demonstrate that As we further diversify our video offerings, we will capitalize on growing those opportunities. as we further diversify our video offerings we will capitalize on growing those opportunities The new engine of sponsorships and biddable is now running. the new engine of sponsorships and biddable is now running The second priority is leveraging AI to make our tools even more powerful, taking Spotify's Ads offering to the next level. the second priority is leveraging ai to make our tools even more powerful taking spotify's ads offering to the next level AI reduces one of the biggest barriers to audio advertising, which is the audio, the creative itself. ai reduces one of the biggest barriers to audio advertising which is the audio the creative itself Roughly 70% of the ads we create for our partners in Spotify Ads Manager are built using AI tools, and we're already seeing the economic benefit of reducing the costs of creative production. roughly 70% of the ads we create for our partners in spotify ads manager are built using ai tools and we're already seeing the economic benefit of reducing the costs of creative production To date, we've generated more than 20,000 ads for over 7,000 advertisers globally, and that number is growing. Advertisers can now create scripts, voiceovers, and fully mix with background music without giving up any creative control. AI is also helping advertisers move more quickly from objective to campaign by improving audience discovery, optimizing delivery in real time, and helping us better personalize ad load for each individual user. In practice, that means customizing the volume of ads that each user receives based on their unique behavior on Spotify. The third priority is building new ad experiences that just weren't possible before. Brands can now sponsor playlists, be in the conversation with creators, and as Spotify introduces more AI-powered premium experiences, brands can also sponsor access to those moments. These are not your standard ad impressions. To date, we've generated more than 20,000 ads for over 7,000 advertisers globally, and that number is growing. to date we've generated more than 20,000 ads for over 7,000 advertisers globally and that number is growing Advertisers can now create scripts, voiceovers, and fully mix with background music without giving up any creative control. advertisers can now create scripts voiceovers and fully mix with background music without giving up any creative control AI is also helping advertisers move more quickly from objective to campaign by improving audience discovery, optimizing delivery in real time, and helping us better personalize ad load for each individual user. ai is also helping advertisers move more quickly from objective to campaign by improving audience discovery optimizing delivery in real time and helping us better personalize ad load for each individual user In practice, that means customizing the volume of ads that each user receives based on their unique behavior on Spotify. in practice that means customizing the volume of ads that each user receives based on their unique behavior on spotify The third priority is building new ad experiences that just weren't possible before. the third priority is building new ad experiences that just weren't possible before Brands can now sponsor playlists, be in the conversation with creators, and as Spotify introduces more AI-powered premium experiences, brands can also sponsor access to those moments. brands can now sponsor playlists be in the conversation with creators and as spotify introduces more ai-powered premium experiences brands can also sponsor access to those moments These are not your standard ad impressions. these are not your standard ad impressions They are deeper, more organic brand integrations that connect advertisers to culture and turn love for Spotify's brand into advertiser value. That's exactly why we expect higher growth in the second half of 2026. Looking ahead, double-digit growth beyond that, and a much larger advertising business over time. When you step back, advertisers have always loved Spotify for our passionate audience, our deep engagement, and the role we play in culture. Now, we have the ads platform to create advertising experiences which fully harness that power. This strategy will drive better outcomes for advertisers, better experiences for users, and better monetization for Spotify. With that, I'll hand it to Gustav to take you under the hood of the intelligence system that powers what we're building next. They are deeper, more organic brand integrations that connect advertisers to culture and turn love for Spotify's brand into advertiser value. That's exactly why we expect higher growth in the second half of 2026. they are deeper more organic brand integrations that connect advertisers to culture and turn love for spotify's brand into advertiser value. that's exactly why we expect higher growth in the second half of 2026 Looking ahead, double-digit growth beyond that, and a much larger advertising business over time. looking ahead double-digit growth beyond that and a much larger advertising business over time When you step back, advertisers have always loved Spotify for our passionate audience, our deep engagement, and the role we play in culture. when you step back advertisers have always loved spotify for our passionate audience our deep engagement and the role we play in culture Now, we have the ads platform to create advertising experiences which fully harness that power. now we have the ads platform to create advertising experiences which fully harness that power This strategy will drive better outcomes for advertisers, better experiences for users, and better monetization for Spotify. this strategy will drive better outcomes for advertisers better experiences for users and better monetization for spotify With that, I'll hand it to Gustav to take you under the hood of the intelligence system that powers what we're building next. with that i'll hand it to gustav to take you under the hood of the intelligence system that powers what we're building next

Speaker 6: Thanks, Katie. 3.4 trillion data points from our hundreds of millions of engaged users every day tell us where we should go next. That's how Spotify has evolved into a product that others try to replicate but often struggle to match. Let me take you under the hood to see what drives that advantage, our intelligence. Just a few reminders. As I said in my earlier remarks, we know that we need general LLM reasoning across facts and domains like math, coding, et cetera. Today, we're buying that and benefiting from that price performance cost curve. We are instead spending our resources on building and training a Large Taste Model, an LTM, using our proprietary data. Let me explain a bit further for you. Thanks, Katie. 3.4 trillion data points from our hundreds of millions of engaged users every day tell us where we should go next. thanks katie 3.4 trillion data points from our hundreds of millions of engaged users every day tell us where we should go next That's how Spotify has evolved into a product that others try to replicate but often struggle to match. that's how spotify has evolved into a product that others try to replicate but often struggle to match Let me take you under the hood to see what drives that advantage, our intelligence. let me take you under the hood to see what drives that advantage our intelligence Just a few reminders. just a few reminders As I said in my earlier remarks, we know that we need general LLM reasoning across facts and domains like math, coding, et cetera. as i said in my earlier remarks we know that we need general llm reasoning across facts and domains like math coding et cetera Today, we're buying that and benefiting from that price performance cost curve. today we're buying that and benefiting from that price performance cost curve We are instead spending our resources on building and training a Large Taste Model, an LTM, using our proprietary data. we are instead spending our resources on building and training a large taste model an ltm using our proprietary data Let me explain a bit further for you. let me explain a bit further for you A traditional language model learns patterns in text by predicting the next word at massive scale. Our LTM actually goes a bit further. It understands not just text, but also every historical user interaction and every piece of content on Spotify. Our advantage isn't just in architecture or knowledge and keeping secrets. It's in the data, both historical but also ongoing. Training these models requires billions of real user behavior sequences over long periods of time, literally years. Unlike the static factual knowledge in an LLM, like the capital of Texas, taste is constantly evolving, so the model also needs to continuously learn from processing trillions of new signals. You simply need an insanely active user base every single day to stay relevant in taste. A traditional language model learns patterns in text by predicting the next word at massive scale. a traditional language model learns patterns in text by predicting the next word at massive scale Our LTM actually goes a bit further. our ltm actually goes a bit further It understands not just text, but also every historical user interaction and every piece of content on Spotify. it understands not just text but also every historical user interaction and every piece of content on spotify Our advantage isn't just in architecture or knowledge and keeping secrets. our advantage isn't just in architecture or knowledge and keeping secrets It's in the data, both historical but also ongoing. it's in the data both historical but also ongoing Training these models requires billions of real user behavior sequences over long periods of time, literally years. training these models requires billions of real user behavior sequences over long periods of time literally years Unlike the static factual knowledge in an LLM, like the capital of Texas, taste is constantly evolving, so the model also needs to continuously learn from processing trillions of new signals. unlike the static factual knowledge in an llm like the capital of texas taste is constantly evolving so the model also needs to continuously learn from processing trillions of new signals You simply need an insanely active user base every single day to stay relevant in taste. you simply need an insanely active user base every single day to stay relevant in taste There isn't just one data set, actually. There are several that we need to combine into the LTM. First is that behavior layer that I just mentioned, the billions of historical user sequences and trillions of daily data points. Second is the metadata layer. That's all the licensed and acquired foundation that maps hundreds of millions of pieces of content across our three verticals, along with all the rich metadata and engagement signals that power the Spotify experience. Third is the creator layer. Less visible maybe to you, but equally important. In fact, you may not know this, but we have proprietary tools developed by us, used by millions of artists, authors, and podcasters along with their publishers, labels, and distributors. There isn't just one data set, actually. there isn't just one data set actually There are several that we need to combine into the LTM. there are several that we need to combine into the ltm First is that behavior layer that I just mentioned, the billions of historical user sequences and trillions of daily data points. first is that behavior layer that i just mentioned the billions of historical user sequences and trillions of daily data points Second is the metadata layer. second is the metadata layer That's all the licensed and acquired foundation that maps hundreds of millions of pieces of content across our three verticals, along with all the rich metadata and engagement signals that power the Spotify experience. that's all the licensed and acquired foundation that maps hundreds of millions of pieces of content across our three verticals along with all the rich metadata and engagement signals that power the spotify experience Third is the creator layer. third is the creator layer Less visible maybe to you, but equally important. less visible maybe to you but equally important In fact, you may not know this, but we have proprietary tools developed by us, used by millions of artists, authors, and podcasters along with their publishers, labels, and distributors. in fact you may not know this but we have proprietary tools developed by us used by millions of artists authors and podcasters along with their publishers labels and distributors These applications generate unique data that powers capabilities like SongDNA, where they correct their own catalog, et cetera, and further strengthens our recommendations and discovery. Fourth is the cultural layer. We're using systems that understand what is happening in the wider world, going outside of Spotify every day to inform features like About the Song or Prompted Playlist about what happens in the world in real time. It doesn't actually stop there. Combined with modern reasoning capabilities, this understanding is actually interactive, not just static. Users can ask for example, as Maya said, a workout playlist tailored to their specific habits or discover books, as Owen said, that fit their exact taste. This result is not just prediction, but the ability to actually shape and generate experiences in real time. These applications generate unique data that powers capabilities like SongDNA, where they correct their own catalog, et cetera, and further strengthens our recommendations and discovery. these applications generate unique data that powers capabilities like songdna where they correct their own catalog et cetera and further strengthens our recommendations and discovery Fourth is the cultural layer. fourth is the cultural layer We're using systems that understand what is happening in the wider world, going outside of Spotify every day to inform features like About the Song or Prompted Playlist about what happens in the world in real time. we're using systems that understand what is happening in the wider world going outside of spotify every day to inform features like about the song or prompted playlist about what happens in the world in real time It doesn't actually stop there. it doesn't actually stop there Combined with modern reasoning capabilities, this understanding is actually interactive, not just static. combined with modern reasoning capabilities this understanding is actually interactive not just static Users can ask for example, as Maya said, a workout playlist tailored to their specific habits or discover books, as Owen said, that fit their exact taste. users can ask for example as maya said a workout playlist tailored to their specific habits or discover books as owen said that fit their exact taste This result is not just prediction, but the ability to actually shape and generate experiences in real time. this result is not just prediction but the ability to actually shape and generate experiences in real time That's how we think about the LTM. Not a standalone system, but a fusion of proprietary taste understanding with advanced reasoning. This is where the economics come into focus. AI isn't just a cost layer for Spotify. It's a product and monetization layer. Our early model deployments are already improving the quality and effectiveness of our personalization, driving meaningful gains across the platform. This includes an almost 10% growth in auto-play song saves, almost 10% improvement in podcast discovery from home, and close to 20% increase in users interacting with DJ suggestions. This is a really big deal that has real implications for retention and lifetime value across our entire user base at scale. That's how we think about the LTM. that's how we think about the ltm Not a standalone system, but a fusion of proprietary taste understanding with advanced reasoning. not a standalone system but a fusion of proprietary taste understanding with advanced reasoning This is where the economics come into focus. this is where the economics come into focus AI isn't just a cost layer for Spotify. ai isn't just a cost layer for spotify It's a product and monetization layer. it's a product and monetization layer Our early model deployments are already improving the quality and effectiveness of our personalization, driving meaningful gains across the platform. our early model deployments are already improving the quality and effectiveness of our personalization driving meaningful gains across the platform This includes an almost 10% growth in auto-play song saves, almost 10% improvement in podcast discovery from home, and close to 20% increase in users interacting with DJ suggestions. this includes an almost 10% growth in auto-play song saves almost 10% improvement in podcast discovery from home and close to 20% increase in users interacting with dj suggestions This is a really big deal that has real implications for retention and lifetime value across our entire user base at scale. this is a really big deal that has real implications for retention and lifetime value across our entire user base at scale Beyond improving the core experience, our Large Taste Model is also enabling entirely new kinds of products, including Prompted Playlist, the interactive DJ, Taste Profile, and many of the generative experiences that you've seen today. Already, these newer AI-powered experiences are being used monthly by nearly a quarter of our U.S. Premium users. Large adoption. When cost per interaction continue to decline and usage expand, users get more value from Spotify. We gain more opportunities to capture that value over time. As Maya and Charlie showed, with personal podcasts and new music fan tools, we believe experiences like these will naturally expand users' willingness to pay. This allows us to scale a tiered model and turn intelligence from a cost driver to a revenue driver. Beyond improving the core experience, our Large Taste Model is also enabling entirely new kinds of products, including Prompted Playlist, the interactive DJ, Taste Profile, and many of the generative experiences that you've seen today. beyond improving the core experience our large taste model is also enabling entirely new kinds of products including prompted playlist the interactive dj taste profile and many of the generative experiences that you've seen today Already, these newer AI-powered experiences are being used monthly by nearly a quarter of our U.S. already these newer ai-powered experiences are being used monthly by nearly a quarter of our u.s Premium users. premium users Large adoption. large adoption When cost per interaction continue to decline and usage expand, users get more value from Spotify. when cost per interaction continue to decline and usage expand users get more value from spotify We gain more opportunities to capture that value over time. we gain more opportunities to capture that value over time As Maya and Charlie showed, with personal podcasts and new music fan tools, we believe experiences like these will naturally expand users' willingness to pay. as maya and charlie showed with personal podcasts and new music fan tools we believe experiences like these will naturally expand users' willingness to pay This allows us to scale a tiered model and turn intelligence from a cost driver to a revenue driver. this allows us to scale a tiered model and turn intelligence from a cost driver to a revenue driver There is intelligence in free, there's more of it in premium, and higher intensity experiences available as add-ons. As costs come down, we can expand these offerings while improving the value. As we said earlier, many times by now, willingness to pay is not an average. It only looks that way when you happen to have a single price point. In reality, it follows a power law with usage intensity and willingness to pay scaling together. I'm not just making that up. AI has already proven this. If you look at the leading LLM products, they are aggressively priced as a power law across usage tiers because their heaviest users get meaningfully more value and are willing to pay much more. There is intelligence in free, there's more of it in premium, and higher intensity experiences available as add-ons. there is intelligence in free there's more of it in premium and higher intensity experiences available as add-ons As costs come down, we can expand these offerings while improving the value. as costs come down we can expand these offerings while improving the value As we said earlier, many times by now, willingness to pay is not an average. as we said earlier many times by now willingness to pay is not an average It only looks that way when you happen to have a single price point. it only looks that way when you happen to have a single price point In reality, it follows a power law with usage intensity and willingness to pay scaling together. in reality it follows a power law with usage intensity and willingness to pay scaling together I'm not just making that up. i'm not just making that up AI has already proven this. ai has already proven this If you look at the leading LLM products, they are aggressively priced as a power law across usage tiers because their heaviest users get meaningfully more value and are willing to pay much more. if you look at the leading llm products they are aggressively priced as a power law across usage tiers because their heaviest users get meaningfully more value and are willing to pay much more That is why we see AI as an opportunity, not a drag. Better product, more value captured, strong margins. That's the model. That's what Niklas will show next, how we're putting this into practice to deliver more value faster and more efficiently. Niklas. That is why we see AI as an opportunity, not a drag. that is why we see ai as an opportunity not a drag Better product, more value captured, strong margins. better product more value captured strong margins That's the model. that's the model That's what Niklas will show next, how we're putting this into practice to deliver more value faster and more efficiently. that's what niklas will show next how we're putting this into practice to deliver more value faster and more efficiently Niklas. niklas

Speaker 16: Thanks, Gustav. Now that Gustav has walked you through the Large Taste Model, I'll show you how we leverage AI to build and ship, and why it's so difficult to replicate. Let us start with how we build. As Nat and Nicole shared, this is not just about productivity. It's about what becomes possible when capacity is no longer a constraint for us. Our engineers are spending more time on high impact problems. AI is embedded across the entire workflow, and we've extended its utility with our own internal systems, making it secure and scalable. Honk, our background coding agent, is a strong example. It builds on leading coding agents, but it's tailored for Spotify, running persistent cloud sessions so engineers can seemingly switch devices, collaborate in real time, and automate routine work. Thanks, Gustav. thanks gustav Now that Gustav has walked you through the Large Taste Model, I'll show you how we leverage AI to build and ship, and why it's so difficult to replicate. now that gustav has walked you through the large taste model i'll show you how we leverage ai to build and ship and why it's so difficult to replicate Let us start with how we build. let us start with how we build As Nat and Nicole shared, this is not just about productivity. as nat and nicole shared this is not just about productivity It's about what becomes possible when capacity is no longer a constraint for us. it's about what becomes possible when capacity is no longer a constraint for us Our engineers are spending more time on high impact problems. our engineers are spending more time on high impact problems AI is embedded across the entire workflow, and we've extended its utility with our own internal systems, making it secure and scalable. ai is embedded across the entire workflow and we've extended its utility with our own internal systems making it secure and scalable Honk, our background coding agent, is a strong example. honk our background coding agent is a strong example It builds on leading coding agents, but it's tailored for Spotify, running persistent cloud sessions so engineers can seemingly switch devices, collaborate in real time, and automate routine work. it builds on leading coding agents but it's tailored for spotify running persistent cloud sessions so engineers can seemingly switch devices collaborate in real time and automate routine work We're seeing up to 90% reduction in the time spent on common maintenance tasks, freeing developers to focus on user-facing innovation. Tasks like dependency upgrades and migrations now run fully autonomously, allowing teams to move even faster with less friction. I've been building software for over 30 years, The AI transition that we're going through now is like nothing I've ever seen before. Today, more than 99% of our developers use AI weekly. Coding productivity is up 76% since last year, from what was already a very high level. More than 73% of our code contributions are AI assisted across more than 4,500 production changes that we ship every day. At the same time, quality remains stable. We're seeing up to 90% reduction in the time spent on common maintenance tasks, freeing developers to focus on user-facing innovation. we're seeing up to 90% reduction in the time spent on common maintenance tasks freeing developers to focus on user-facing innovation Tasks like dependency upgrades and migrations now run fully autonomously, allowing teams to move even faster with less friction. tasks like dependency upgrades and migrations now run fully autonomously allowing teams to move even faster with less friction I've been building software for over 30 years, The AI transition that we're going through now is like nothing I've ever seen before. i've been building software for over 30 years the ai transition that we're going through now is like nothing i've ever seen before Today, more than 99% of our developers use AI weekly. today more than 99% of our developers use ai weekly Coding productivity is up 76% since last year, from what was already a very high level. coding productivity is up 76% since last year from what was already a very high level More than 73% of our code contributions are AI assisted across more than 4,500 production changes that we ship every day. more than 73% of our code contributions are ai assisted across more than 4,500 production changes that we ship every day At the same time, quality remains stable. at the same time quality remains stable In fact, as I've been preparing this presentation over the last few weeks, we've had to change these numbers multiple times because they keep going up. We're no longer primarily scaling through headcount. We're scaling by increasing the impact of the people that we already have. You can also see this in our economics. Revenue per engineer is rising. Each engineer's work reaches more users and supports more use cases. Our ability to scale our R&D has changed with AI, and once these systems are built, the cost to serve each additional user will further improve. In practical terms, one engineer now supports more output, more features, more services, and more user value. The same team can power a broader and more complex set of experiences. Next, let's take a look at how we ship. In fact, as I've been preparing this presentation over the last few weeks, we've had to change these numbers multiple times because they keep going up. in fact as i've been preparing this presentation over the last few weeks we've had to change these numbers multiple times because they keep going up We're no longer primarily scaling through headcount. we're no longer primarily scaling through headcount We're scaling by increasing the impact of the people that we already have. we're scaling by increasing the impact of the people that we already have You can also see this in our economics. you can also see this in our economics Revenue per engineer is rising. revenue per engineer is rising Each engineer's work reaches more users and supports more use cases. each engineer's work reaches more users and supports more use cases Our ability to scale our R&D has changed with AI, and once these systems are built, the cost to serve each additional user will further improve. our ability to scale our r&d has changed with ai and once these systems are built the cost to serve each additional user will further improve In practical terms, one engineer now supports more output, more features, more services, and more user value. in practical terms one engineer now supports more output more features more services and more user value The same team can power a broader and more complex set of experiences. the same team can power a broader and more complex set of experiences Next, let's take a look at how we ship. next let's take a look at how we ship As Nat mentioned, we moved beyond traditional prototyping. Today, anyone at Spotify, not just our engineers, but also our product managers, our designers, and business leaders, has in fact all the way up to our executives like Gustav, can and do build working prototypes right on top of our production code base. Our real data, our real design system, all running inside our actual app. We have an internal app store where these prototypes can be discovered, installed, and tested, all kept in sync with our live code base. Ideas are now tested in real conditions and with far fewer resources than before. What used to take weeks can now be validated in minutes. For most of the streaming era, platforms had a wide downlink and a very narrow uplink. As Nat mentioned, we moved beyond traditional prototyping. as nat mentioned we moved beyond traditional prototyping Today, anyone at Spotify, not just our engineers, but also our product managers, our designers, and business leaders, has in fact all the way up to our executives like Gustav, can and do build working prototypes right on top of our production code base. today anyone at spotify not just our engineers but also our product managers our designers and business leaders has in fact all the way up to our executives like gustav can and do build working prototypes right on top of our production code base Our real data, our real design system, all running inside our actual app. our real data our real design system all running inside our actual app We have an internal app store where these prototypes can be discovered, installed, and tested, all kept in sync with our live code base. we have an internal app store where these prototypes can be discovered installed and tested all kept in sync with our live code base Ideas are now tested in real conditions and with far fewer resources than before. ideas are now tested in real conditions and with far fewer resources than before What used to take weeks can now be validated in minutes. what used to take weeks can now be validated in minutes For most of the streaming era, platforms had a wide downlink and a very narrow uplink. for most of the streaming era platforms had a wide downlink and a very narrow uplink We could deliver millions of pieces of content, user could only respond back to us with a skip or save or like. We then had to infer their intent. Gen AI changes that dynamic, making the system interactive. We move from guessing to understanding and from one-way consumption to real-time collaboration, with users telling us what they want in natural language. Today, you've heard about DJ, Prompted Playlist, and Taste Profile. Together, they represent a shift towards a more interactive and user-controlled Spotify. Today, I'm very excited to tell you about how this shift is coming to life in Studio by Spotify Labs, a standalone desktop app that takes personal podcasts further. It will be available soon as a research preview for premium users in more than 20 markets. We could deliver millions of pieces of content, user could only respond back to us with a skip or save or like. we could deliver millions of pieces of content user could only respond back to us with a skip or save or like We then had to infer their intent. we then had to infer their intent Gen AI changes that dynamic, making the system interactive. gen ai changes that dynamic making the system interactive We move from guessing to understanding and from one-way consumption to real-time collaboration, with users telling us what they want in natural language. Today, you've heard about DJ, Prompted Playlist, and Taste Profile. we move from guessing to understanding and from one-way consumption to real-time collaboration with users telling us what they want in natural language. today you've heard about dj prompted playlist and taste profile Together, they represent a shift towards a more interactive and user-controlled Spotify. together they represent a shift towards a more interactive and user-controlled spotify Today, I'm very excited to tell you about how this shift is coming to life in Studio by Spotify Labs, a standalone desktop app that takes personal podcasts further. today i'm very excited to tell you about how this shift is coming to life in studio by spotify labs a standalone desktop app that takes personal podcasts further It will be available soon as a research preview for premium users in more than 20 markets. it will be available soon as a research preview for premium users in more than 20 markets Studio understands your Spotify taste across music, podcasts, and audiobooks. It can draw on world knowledge, and with your permission, connect to services like your calendar, inbox, notes, and feeds. You simply ask for what you need, like a briefing for your day or an overview of your weekend plans, and Studio creates it for you. Because it's built for Spotify, the output can be saved directly to your library, where your personal private content lives alongside the music, audiobooks, and podcasts you already love. By understanding, building, and shipping faster than ever, Spotify is becoming the home for personal media. Not just what already exists, but what users create and carry throughout their day. Finally, let's dig into what sits underneath all of this. Studio understands your Spotify taste across music, podcasts, and audiobooks. studio understands your spotify taste across music podcasts and audiobooks It can draw on world knowledge, and with your permission, connect to services like your calendar, inbox, notes, and feeds. it can draw on world knowledge and with your permission connect to services like your calendar inbox notes and feeds You simply ask for what you need, like a briefing for your day or an overview of your weekend plans, and Studio creates it for you. you simply ask for what you need like a briefing for your day or an overview of your weekend plans and studio creates it for you Because it's built for Spotify, the output can be saved directly to your library, where your personal private content lives alongside the music, audiobooks, and podcasts you already love. because it's built for spotify the output can be saved directly to your library where your personal private content lives alongside the music audiobooks and podcasts you already love By understanding, building, and shipping faster than ever, Spotify is becoming the home for personal media. by understanding building and shipping faster than ever spotify is becoming the home for personal media Not just what already exists, but what users create and carry throughout their day. not just what already exists but what users create and carry throughout their day Finally, let's dig into what sits underneath all of this. finally let's dig into what sits underneath all of this Gustav described our Large Taste Model and the data advantage behind it. Let me show you what's actually inside. The model is trained through continued pre-training on our proprietary data set. Every track, artist, and podcast in our catalog is mapped to a learnable token that captures both what the content is and how users engage with it. Like traditional recommendation systems that predict from historical patterns, the model generates candidates directly, much like a language model generates text. This is the architectural shift that makes the generation era Gustav described technically possible. That is also what makes our agent fundamentally different from a generic AI assistant. Most start from zero every session. Spotify reasons natively over taste so that conversation reflects years of real listening behavior, not just a prompt and a search query. Gustav described our Large Taste Model and the data advantage behind it. gustav described our large taste model and the data advantage behind it Let me show you what's actually inside. let me show you what's actually inside The model is trained through continued pre-training on our proprietary data set. the model is trained through continued pre-training on our proprietary data set Every track, artist, and podcast in our catalog is mapped to a learnable token that captures both what the content is and how users engage with it. every track artist and podcast in our catalog is mapped to a learnable token that captures both what the content is and how users engage with it Like traditional recommendation systems that predict from historical patterns, the model generates candidates directly, much like a language model generates text. like traditional recommendation systems that predict from historical patterns the model generates candidates directly much like a language model generates text This is the architectural shift that makes the generation era Gustav described technically possible. this is the architectural shift that makes the generation era gustav described technically possible That is also what makes our agent fundamentally different from a generic AI assistant. that is also what makes our agent fundamentally different from a generic ai assistant Most start from zero every session. most start from zero every session Spotify reasons natively over taste so that conversation reflects years of real listening behavior, not just a prompt and a search query. spotify reasons natively over taste so that conversation reflects years of real listening behavior not just a prompt and a search query What we've built is not just a model. It's a system where data, models, agents, and our engineering platform work together to deliver personalized experiences at scale. Because it runs on what we believe is the world's largest licensed audio and taste data set, it compounds. Every interaction improves the model, and every improvement can reach hundreds of millions of users through a single platform. Because this system is built on licensed data, trust is foundational. Spotify's role is at the center of the ecosystem, strengthening the connection between creators and users, rather than abstracting away from it. This is what we mean when we say that Spotify does not rent the future. We build it. Now over to Christian. What we've built is not just a model. what we've built is not just a model It's a system where data, models, agents, and our engineering platform work together to deliver personalized experiences at scale. it's a system where data models agents and our engineering platform work together to deliver personalized experiences at scale Because it runs on what we believe is the world's largest licensed audio and taste data set, it compounds. because it runs on what we believe is the world's largest licensed audio and taste data set it compounds Every interaction improves the model, and every improvement can reach hundreds of millions of users through a single platform. every interaction improves the model and every improvement can reach hundreds of millions of users through a single platform Because this system is built on licensed data, trust is foundational. because this system is built on licensed data trust is foundational Spotify's role is at the center of the ecosystem, strengthening the connection between creators and users, rather than abstracting away from it. spotify's role is at the center of the ecosystem strengthening the connection between creators and users rather than abstracting away from it This is what we mean when we say that Spotify does not rent the future. this is what we mean when we say that spotify does not rent the future We build it. we build it Now over to Christian. now over to christian

Speaker 4: Hello, everyone. Nice to see you all here today. Before I start, let me tell you that all growth rates that I will be referencing are on a constant currency basis, unless otherwise said or noted. I wish I had cool guys telling that instead for me, but next time maybe. Differentiated experiences creates differentiated economics. Here's what ours looks like. Four years ago, we made a commitment: turn Spotify into great business by growing music, scaling our podcasting into profitability, and launching accretive new verticals like audiobooks. We delivered, and today we are stronger than ever, proving that we can scale efficiently and we can monetize effectively. As you heard, monetization starts on the top of the funnel, where we delivered a healthy 17% CAGR in users over the past four years. Hello, everyone. hello everyone Nice to see you all here today. nice to see you all here today Before I start, let me tell you that all growth rates that I will be referencing are on a constant currency basis, unless otherwise said or noted. before i start let me tell you that all growth rates that i will be referencing are on a constant currency basis unless otherwise said or noted I wish I had cool guys telling that instead for me, but next time maybe. i wish i had cool guys telling that instead for me but next time maybe Differentiated experiences creates differentiated economics. differentiated experiences creates differentiated economics Here's what ours looks like. here's what ours looks like Four years ago, we made a commitment: turn Spotify into great business by growing music, scaling our podcasting into profitability, and launching accretive new verticals like audiobooks. four years ago we made a commitment turn spotify into great business by growing music scaling our podcasting into profitability and launching accretive new verticals like audiobooks We delivered, and today we are stronger than ever, proving that we can scale efficiently and we can monetize effectively. we delivered and today we are stronger than ever proving that we can scale efficiently and we can monetize effectively As you heard, monetization starts on the top of the funnel, where we delivered a healthy 17% CAGR in users over the past four years. as you heard monetization starts on the top of the funnel where we delivered a healthy 17% cagr in users over the past four years Growth is coming from every region, taking us to more than 760 million users, MAU, globally as we continue progressing towards 1 billion users and beyond. That scale has been a key driver of our healthy subscription business. It's grown at 13% CAGR to nearly 300 million subscribers. Engagement remains strong and continues to deepen. The number of subscribers using Spotify more than 28 days per month across multiple devices and verticals is growing. That breadth and frequency of use is a powerful drive of retention. Those fundamentals, scale, engagement, and retention, that drives our financial model. Here's what that means for our performance. Alex talked you through targets we set forth in 2022. The results speak for themselves. Growth is coming from every region, taking us to more than 760 million users, MAU, globally as we continue progressing towards 1 billion users and beyond. growth is coming from every region taking us to more than 760 million users mau globally as we continue progressing towards 1 billion users and beyond That scale has been a key driver of our healthy subscription business. that scale has been a key driver of our healthy subscription business It's grown at 13% CAGR to nearly 300 million subscribers. it's grown at 13% cagr to nearly 300 million subscribers Engagement remains strong and continues to deepen. engagement remains strong and continues to deepen The number of subscribers using Spotify more than 28 days per month across multiple devices and verticals is growing. the number of subscribers using spotify more than 28 days per month across multiple devices and verticals is growing That breadth and frequency of use is a powerful drive of retention. that breadth and frequency of use is a powerful drive of retention Those fundamentals, scale, engagement, and retention, that drives our financial model. those fundamentals scale engagement and retention that drives our financial model Here's what that means for our performance. here's what that means for our performance Alex talked you through targets we set forth in 2022. alex talked you through targets we set forth in 2022 The results speak for themselves. the results speak for themselves 18% CAGR, more than 7 percentage points of gross margin expansion, and nearly EUR 3 billion in free cash flow generated in 2025 alone. It was the result of a disciplined financial model. Targeted investments into music business, audiobooks, video podcasting, and the beginnings of our AI capabilities that we heard about today. As the impact built over time, we stayed patient. Today, Spotify generates meaningful cash flow, and we are entering this next phase from a position of real strength. Our advertising business grew at a 10% CAGR, even as we were re-platforming the ad stack and absorbed the short-term pressure that came with it. That work is important because it positioned the business for a larger opportunity. 18% CAGR, more than 7 percentage points of gross margin expansion, and nearly EUR 3 billion in free cash flow generated in 2025 alone. 18% cagr more than 7 percentage points of gross margin expansion and nearly eur 3 billion in free cash flow generated in 2025 alone It was the result of a disciplined financial model. alone it was the result of a disciplined financial model Targeted investments into music business, audiobooks, video podcasting, and the beginnings of our AI capabilities that we heard about today. targeted investments into music business audiobooks video podcasting and the beginnings of our ai capabilities that we heard about today As the impact built over time, we stayed patient. as the impact built over time we stayed patient Today, Spotify generates meaningful cash flow, and we are entering this next phase from a position of real strength. today spotify generates meaningful cash flow and we are entering this next phase from a position of real strength Our advertising business grew at a 10% CAGR, even as we were re-platforming the ad stack and absorbed the short-term pressure that came with it. our advertising business grew at a 10% cagr even as we were re-platforming the ad stack and absorbed the short-term pressure that came with it That work is important because it positioned the business for a larger opportunity. that work is important because it positioned the business for a larger opportunity Gross profit grew faster than revenue at 23% CAGR, with gross margin reaching 32% in 2025. About one-third of that came from the music business, and with the rest driven by podcasting and audiobooks. Today, both music and non-music verticals together operate above 30% margin. In 2025, the gross profit we generated from Marketplace was four times higher than 2021. Our offering of artist tools and licensing initiatives continues to create value for both artists and for Spotify. At the same time, we maintained a tight control of cost. Operating expense growth has remained essentially flat since 2022, as the inflationary increase in R&D and sales and marketing were more than offset by the 23% reduction in full-time headcount. That discipline delivered over 18 percentage points of operating margin expansion since 2022. Gross profit grew faster than revenue at 23% CAGR, with gross margin reaching 32% in 2025. gross profit grew faster than revenue at 23% cagr with gross margin reaching 32% in 2025 About one-third of that came from the music business, and with the rest driven by podcasting and audiobooks. about one-third of that came from the music business and with the rest driven by podcasting and audiobooks Today, both music and non-music verticals together operate above 30% margin. today both music and non-music verticals together operate above 30% margin In 2025, the gross profit we generated from Marketplace was four times higher than 2021. in 2025 the gross profit we generated from marketplace was four times higher than 2021 Our offering of artist tools and licensing initiatives continues to create value for both artists and for Spotify. our offering of artist tools and licensing initiatives continues to create value for both artists and for spotify At the same time, we maintained a tight control of cost. at the same time we maintained a tight control of cost Operating expense growth has remained essentially flat since 2022, as the inflationary increase in R&D and sales and marketing were more than offset by the 23% reduction in full-time headcount. operating expense growth has remained essentially flat since 2022 as the inflationary increase in r&d and sales and marketing were more than offset by the 23% reduction in full-time headcount That discipline delivered over 18 percentage points of operating margin expansion since 2022. that discipline delivered over 18 percentage points of operating margin expansion since 2022 Combined with our revenue growth and gross margin expansion, this moved us from a loss-making position to generating EUR 2.2 billion in operating income 2025 at 12.8% operating margin. All of this fundamentally has reshaped our free cash flow profile. In 2025, free cash flow margin reached approximately 17%. That strengthened our balance sheet, and it gives us the flexibility to invest in what comes next. Before we look ahead, let me briefly outline how we think about return on investment. It shapes our financial strategy. At Spotify, we invest where we can generate returns above our cost of capital, and we stay disciplined everywhere else. What makes our business unique is that the most reliable leading indicator of a return above WACC isn't always IRR on a spreadsheet. Combined with our revenue growth and gross margin expansion, this moved us from a loss-making position to generating EUR 2.2 billion in operating income 2025 at 12.8% operating margin. combined with our revenue growth and gross margin expansion this moved us from a loss-making position to generating eur 2.2 billion in operating income 2025 at 12.8% operating margin All of this fundamentally has reshaped our free cash flow profile. all of this fundamentally has reshaped our free cash flow profile In 2025, free cash flow margin reached approximately 17%. in 2025 free cash flow margin reached approximately 17% That strengthened our balance sheet, and it gives us the flexibility to invest in what comes next. that strengthened our balance sheet and it gives us the flexibility to invest in what comes next Before we look ahead, let me briefly outline how we think about return on investment. before we look ahead let me briefly outline how we think about return on investment It shapes our financial strategy. it shapes our financial strategy At Spotify, we invest where we can generate returns above our cost of capital, and we stay disciplined everywhere else. at spotify we invest where we can generate returns above our cost of capital and we stay disciplined everywhere else What makes our business unique is that the most reliable leading indicator of a return above WACC isn't always IRR on a spreadsheet. what makes our business unique is that the most reliable leading indicator of a return above wacc isn't always irr on a spreadsheet It's an increase in customer lifetime value. You heard the mechanics throughout today. The KPI we underwrite are centered on engagement, revenue, efficiency, and retention. Our bets from Audiobooks+ to DJ to Reserve have clearly quantified targets tied to those drivers. It's the way these bets build on each other over time that drives lasting improvements in LTV. This creates a direct chain to free cash flow growth. In the U.S. alone, our largest market, customer LTV has increased by more than 70% since 2022. We see similar trends across markets of every stage of maturity, from developed markets like Sweden to faster-growing markets like Brazil and India. AI accelerates our ability to make these bets with even greater velocity. Our bar for returns stays the same, and the direction is clear. It's an increase in customer lifetime value. it's an increase in customer lifetime value You heard the mechanics throughout today. you heard the mechanics throughout today The KPI we underwrite are centered on engagement, revenue, efficiency, and retention. the kpi we underwrite are centered on engagement revenue efficiency and retention Our bets from Audiobooks+ to DJ to Reserve have clearly quantified targets tied to those drivers. our bets from audiobooks+ to dj to reserve have clearly quantified targets tied to those drivers It's the way these bets build on each other over time that drives lasting improvements in LTV. it's the way these bets build on each other over time that drives lasting improvements in ltv This creates a direct chain to free cash flow growth. this creates a direct chain to free cash flow growth In the U.S. alone, our largest market, customer LTV has increased by more than 70% since 2022. in the u.s alone our largest market customer ltv has increased by more than 70% since 2022 We see similar trends across markets of every stage of maturity, from developed markets like Sweden to faster-growing markets like Brazil and India. we see similar trends across markets of every stage of maturity from developed markets like sweden to faster-growing markets like brazil and india AI accelerates our ability to make these bets with even greater velocity. ai accelerates our ability to make these bets with even greater velocity Our bar for returns stays the same, and the direction is clear. our bar for returns stays the same and the direction is clear Unique economics is keeping improving. Let's look at what this framework will produce by 2030. First, we are targeting a mid-teens revenue CAGR. The drivers are clear. We believe we're on our way to 1 billion MAU. We have emerging and developing markets as twin engine fueling growth in subscribers. Subscriber retention is already best in class. We see opportunities to improve it even further. ARPU will become a more meaningful growth driver, supported by thoughtful price adjustments, more defined product tiers, and an expanding mix of add-ons and à la carte offerings. This applies for both Premium and add-on-supported users. Our clear success with Audiobooks+ shows what's possible when we deliver for super users. The add-on opportunity is significant across music, podcast, audiobooks, and beyond. Unique economics is keeping improving. unique economics is keeping improving Let's look at what this framework will produce by 2030. let's look at what this framework will produce by 2030 First, we are targeting a mid-teens revenue CAGR. first we are targeting a mid-teens revenue cagr The drivers are clear. the drivers are clear We believe we're on our way to 1 billion MAU. we believe we're on our way to 1 billion mau We have emerging and developing markets as twin engine fueling growth in subscribers. we have emerging and developing markets as twin engine fueling growth in subscribers Subscriber retention is already best in class. subscriber retention is already best in class We see opportunities to improve it even further. we see opportunities to improve it even further ARPU will become a more meaningful growth driver, supported by thoughtful price adjustments, more defined product tiers, and an expanding mix of add-ons and à la carte offerings. arpu will become a more meaningful growth driver supported by thoughtful price adjustments more defined product tiers and an expanding mix of add-ons and à la carte offerings This applies for both Premium and add-on-supported users. this applies for both premium and add-on-supported users Our clear success with Audiobooks+ shows what's possible when we deliver for super users. our clear success with audiobooks+ shows what's possible when we deliver for super users The add-on opportunity is significant across music, podcast, audiobooks, and beyond. the add-on opportunity is significant across music podcast audiobooks and beyond AI will enhance this opportunity and our already best-in-class personalization. We plan to build on this momentum over time, unlocking new, scalable ARPU streams across the platform. We also expect our advertising business to re-accelerate growth into the double-digit range. We expect that to start ramping towards these levels in the second half of 2026. More users, more advertisers, better monetization per impression. Let's talk about where we're going with profitability. We expect gross margin of 35%-40% by 2030. Within Premium, music has further room to run, supported by Marketplace and add-ons. Our higher-margin non-music offerings expand to more markets and monetization deepens. The favorable revenue mix shift will drive further improvements. In ad-supported, the story is automation at scale. We expect music margins to continue to improve, particularly in emerging markets and through Marketplace. AI will enhance this opportunity and our already best-in-class personalization. ai will enhance this opportunity and our already best-in-class personalization We plan to build on this momentum over time, unlocking new, scalable ARPU streams across the platform. we plan to build on this momentum over time unlocking new scalable arpu streams across the platform We also expect our advertising business to re-accelerate growth into the double-digit range. we also expect our advertising business to re-accelerate growth into the double-digit range We expect that to start ramping towards these levels in the second half of 2026. we expect that to start ramping towards these levels in the second half of 2026 More users, more advertisers, better monetization per impression. more users more advertisers better monetization per impression Let's talk about where we're going with profitability. let's talk about where we're going with profitability We expect gross margin of 35%-40% by 2030. we expect gross margin of 35%-40% by 2030 Within Premium, music has further room to run, supported by Marketplace and add-ons. within premium music has further room to run supported by marketplace and add-ons Our higher-margin non-music offerings expand to more markets and monetization deepens. our higher-margin non-music offerings expand to more markets and monetization deepens The favorable revenue mix shift will drive further improvements. the favorable revenue mix shift will drive further improvements In ad-supported, the story is automation at scale. improvements in ad-supported the story is automation at scale We expect music margins to continue to improve, particularly in emerging markets and through Marketplace. we expect music margins to continue to improve particularly in emerging markets and through marketplace Podcasting has made significant progress moving from a deeply negative in 2021 to what we believe will be more than 20% in 2026. From there, we expect it to grow. Long-term, we see a path for 40% driven by both first and third-party content. At Spotify, we manage cost with rigor and with constant focus on efficiency. That discipline underpins our ability to scale financially. It gives us both speed and flexibility to invest where we see strong returns. We see strong returns potential, we will go there. In 2026, we are investing in areas where we see clear returns. As we mentioned on our last earnings call, the OPEX will step up. We have told you that for quarter 2. It will step up in quarter 2 and quarter 3 before moderating into quarter 4 and 2027. Podcasting has made significant progress moving from a deeply negative in 2021 to what we believe will be more than 20% in 2026. podcasting has made significant progress moving from a deeply negative in 2021 to what we believe will be more than 20% in 2026 From there, we expect it to grow. from there we expect it to grow Long-term, we see a path for 40% driven by both first and third-party content. long-term we see a path for 40% driven by both first and third-party content At Spotify, we manage cost with rigor and with constant focus on efficiency. at spotify we manage cost with rigor and with constant focus on efficiency That discipline underpins our ability to scale financially. that discipline underpins our ability to scale financially It gives us both speed and flexibility to invest where we see strong returns. it gives us both speed and flexibility to invest where we see strong returns We see strong returns potential, we will go there. we see strong returns potential we will go there In 2026, we are investing in areas where we see clear returns. in 2026 we are investing in areas where we see clear returns As we mentioned on our last earnings call, the OPEX will step up. as we mentioned on our last earnings call the opex will step up We have told you that for quarter 2. we have told you that for quarter 2 It will step up in quarter 2 and quarter 3 before moderating into quarter 4 and 2027. it will step up in quarter 2 and quarter 3 before moderating into quarter 4 and 2027 This represents a temporary increase of roughly EUR 200 million on marketing and R&D. We will naturally calibrate these costs as we move through this short-term increase. As you have seen from us over the last four years, we always strike a balance between investments and ensuring sustainable margin expansion. This will not change going forward. On the marketing front, we are investing opportunistically to drive conversion and increase LTV featuring key product enhancement. Our focus on differentiation, conversion, and retention is why we continue to add value to Premium. This enables monetization over time. The customer acquisition cost is incurred upfront. We know that. The payoff comes from higher LTV, growing revenue at scale, in addition to improving sales and marketing leverage. Our AI R&D spend has two pieces. This represents a temporary increase of roughly EUR 200 million on marketing and R&D. this represents a temporary increase of roughly eur 200 million on marketing and r&d We will naturally calibrate these costs as we move through this short-term increase. we will naturally calibrate these costs as we move through this short-term increase As you have seen from us over the last four years, we always strike a balance between investments and ensuring sustainable margin expansion. as you have seen from us over the last four years we always strike a balance between investments and ensuring sustainable margin expansion This will not change going forward. this will not change going forward On the marketing front, we are investing opportunistically to drive conversion and increase LTV featuring key product enhancement. on the marketing front we are investing opportunistically to drive conversion and increase ltv featuring key product enhancement Our focus on differentiation, conversion, and retention is why we continue to add value to Premium. our focus on differentiation conversion and retention is why we continue to add value to premium This enables monetization over time. this enables monetization over time The customer acquisition cost is incurred upfront. the customer acquisition cost is incurred upfront We know that. we know that The payoff comes from higher LTV, growing revenue at scale, in addition to improving sales and marketing leverage. the payoff comes from higher ltv growing revenue at scale in addition to improving sales and marketing leverage Our AI R&D spend has two pieces. our ai r&d spend has two pieces The first one is somewhat front-loaded, and that is primarily the large taste model like Gustav just talked about. This will drive improved personalization and scale the new add-ons. The second one is ongoing, recurring developer usage of AI like Claude Code. This will lead to shorter build and ship cycles. Our global scale makes distribution and monetization of every new product more efficient. As these two forces compound, we will see accelerating LTV expansion, shortened payback periods, and improved operating leverage. All of this points to an operating margin of at least 20% 2030. Before we get into free cash flow, just a couple of words on our taxes. We estimate our normalized P&L tax rate to be around 22% and foresee that we will become a full taxpayer by 2027. The first one is somewhat front-loaded, and that is primarily the large taste model like Gustav just talked about. the first one is somewhat front-loaded and that is primarily the large taste model like gustav just talked about This will drive improved personalization and scale the new add-ons. this will drive improved personalization and scale the new add-ons The second one is ongoing, recurring developer usage of AI like Claude Code. the second one is ongoing recurring developer usage of ai like claude code This will lead to shorter build and ship cycles. this will lead to shorter build and ship cycles Our global scale makes distribution and monetization of every new product more efficient. our global scale makes distribution and monetization of every new product more efficient As these two forces compound, we will see accelerating LTV expansion, shortened payback periods, and improved operating leverage. as these two forces compound we will see accelerating ltv expansion shortened payback periods and improved operating leverage All of this points to an operating margin of at least 20% 2030. all of this points to an operating margin of at least 20% 2030 Before we get into free cash flow, just a couple of words on our taxes. before we get into free cash flow just a couple of words on our taxes We estimate our normalized P&L tax rate to be around 22% and foresee that we will become a full taxpayer by 2027. we estimate our normalized p&l tax rate to be around 22% and foresee that we will become a full taxpayer by 2027 On average, over time, we estimate our cash tax to be around 90% of our P&L tax rate. That leads us into the free cash flow. We have a capital-light model, favorable working capital dynamics from upfront customer payments, and one of the world's largest free paid subscription business. Our operating improvements directly translates into cash flow. When gross margin expands, it flows. When LTV improves, it compounds. We expect free cash flow to show strong growth through 2030. Our free cash flow per share will be part of our scorecard going forward. Free cash flow per share is the metric that tells us without ambiguity whether we are allocating capital well, executing the model, and drive value creation. It's gone from around 0 in 2021 to approximately EUR 15 per share today. On average, over time, we estimate our cash tax to be around 90% of our P&L tax rate. on average over time we estimate our cash tax to be around 90% of our p&l tax rate That leads us into the free cash flow. that leads us into the free cash flow We have a capital-light model, favorable working capital dynamics from upfront customer payments, and one of the world's largest free paid subscription business. we have a capital-light model favorable working capital dynamics from upfront customer payments and one of the world's largest free paid subscription business Our operating improvements directly translates into cash flow. our operating improvements directly translates into cash flow When gross margin expands, it flows. when gross margin expands it flows When LTV improves, it compounds. when ltv improves it compounds We expect free cash flow to show strong growth through 2030. we expect free cash flow to show strong growth through 2030 Our free cash flow per share will be part of our scorecard going forward. our free cash flow per share will be part of our scorecard going forward Free cash flow per share is the metric that tells us without ambiguity whether we are allocating capital well, executing the model, and drive value creation. free cash flow per share is the metric that tells us without ambiguity whether we are allocating capital well executing the model and drive value creation It's gone from around 0 in 2021 to approximately EUR 15 per share today. it's gone from around 0 in 2021 to approximately eur 15 per share today Now let's talk about capital allocation. You all know we carry cash and short-term investment balance of EUR 8.8 billion today. With a free cash flow development, that means that this balance could grow considerably over the next few years. Simply put, capital is not a constraint. That said, we will remain disciplined in how we allocate capital guided by a clear ranking. We will keep a strong balance sheet that gives us flexibility and supports the execution of our strategy. This enables us to move on the right opportunities, even in a constrained market condition. First, we will continue to invest organically for growth that drives long-term value into R&D, content, marketing, and new verticals. Wherever we have a clear line of sight on returns above cost of capital. Now let's talk about capital allocation. now let's talk about capital allocation You all know we carry cash and short-term investment balance of EUR 8.8 billion today. you all know we carry cash and short-term investment balance of eur 8.8 billion today With a free cash flow development, that means that this balance could grow considerably over the next few years. with a free cash flow development that means that this balance could grow considerably over the next few years Simply put, capital is not a constraint. simply put capital is not a constraint That said, we will remain disciplined in how we allocate capital guided by a clear ranking. that said we will remain disciplined in how we allocate capital guided by a clear ranking We will keep a strong balance sheet that gives us flexibility and supports the execution of our strategy. we will keep a strong balance sheet that gives us flexibility and supports the execution of our strategy This enables us to move on the right opportunities, even in a constrained market condition. this enables us to move on the right opportunities even in a constrained market condition First, we will continue to invest organically for growth that drives long-term value into R&D, content, marketing, and new verticals. first we will continue to invest organically for growth that drives long-term value into r&d content marketing and new verticals Wherever we have a clear line of sight on returns above cost of capital. wherever we have a clear line of sight on returns above cost of capital The LTV framework is our real-time signal, not a projected spreadsheet. Our bias remains towards build first as that remains our core strength. Second, we will allocate capital to acquisitions when they can accelerate our strategy. The bar is consistent, returns comfortably above our cost of capital with a clear path to cash flow accretion. Third, capital to shareholders. We will of course continue to repurchase the equity compensation we grant employees annually. This protects against dilution. It is currently below 1 million shares per year. Given the stronger cash flow in the years ahead, even with M&A, we expect that we will also return excess cash to shareholders. This will be over and above the anti-dilution baseline. The thesis is straightforward. The LTV framework is our real-time signal, not a projected spreadsheet. the ltv framework is our real-time signal not a projected spreadsheet Our bias remains towards build first as that remains our core strength. our bias remains towards build first as that remains our core strength Second, we will allocate capital to acquisitions when they can accelerate our strategy. second we will allocate capital to acquisitions when they can accelerate our strategy The bar is consistent, returns comfortably above our cost of capital with a clear path to cash flow accretion. the bar is consistent returns comfortably above our cost of capital with a clear path to cash flow accretion Third, capital to shareholders. third capital to shareholders We will of course continue to repurchase the equity compensation we grant employees annually. we will of course continue to repurchase the equity compensation we grant employees annually This protects against dilution. this protects against dilution It is currently below 1 million shares per year. it is currently below 1 million shares per year Given the stronger cash flow in the years ahead, even with M&A, we expect that we will also return excess cash to shareholders. given the stronger cash flow in the years ahead even with m&a we expect that we will also return excess cash to shareholders This will be over and above the anti-dilution baseline. this will be over and above the anti-dilution baseline The thesis is straightforward. the thesis is straightforward Deploy capital where returns are compelling, stay disciplined where they aren't, and allow free cash flow to build over time. Four years ago, Spotify made a commitments. We delivered. What you heard today is how we run the same machine over the next five years, not as an aspiration, but as an extension. It's an extension of the framework we have been operating and refining for many years. Now back to Alex and Gustav. Deploy capital where returns are compelling, stay disciplined where they aren't, and allow free cash flow to build over time. deploy capital where returns are compelling stay disciplined where they aren't and allow free cash flow to build over time Four years ago, Spotify made a commitments. four years ago spotify made a commitments We delivered. we delivered What you heard today is how we run the same machine over the next five years, not as an aspiration, but as an extension. what you heard today is how we run the same machine over the next five years not as an aspiration but as an extension It's an extension of the framework we have been operating and refining for many years. it's an extension of the framework we have been operating and refining for many years Now back to Alex and Gustav. now back to alex and gustav

Speaker 1: Okay, this brings us to the close of our presentation. Hopefully, after today's update, you have a clear picture of Spotify's future. The scale that we have built unlocks vast opportunities for value creation. The world is moving in our direction towards more personalized experiences, more interactivity, and more control. These are areas that we know we can lead, because living in the future has been part of our DNA for a long time. Never getting comfortable. Yeah. Looking to see where technology, behavior, and culture are heading before it becomes obvious to everyone else. That instinct has shaped some of our biggest decisions over the years and enabled us to define and build for what comes next. What matters most in this next chapter, taste, trust, culture, has always mattered to Spotify. Okay, this brings us to the close of our presentation. okay this brings us to the close of our presentation Hopefully, after today's update, you have a clear picture of Spotify's future. hopefully after today's update you have a clear picture of spotify's future The scale that we have built unlocks vast opportunities for value creation. the scale that we have built unlocks vast opportunities for value creation The world is moving in our direction towards more personalized experiences, more interactivity, and more control. the world is moving in our direction towards more personalized experiences more interactivity and more control These are areas that we know we can lead, because living in the future has been part of our DNA for a long time. these are areas that we know we can lead because living in the future has been part of our dna for a long time Never getting comfortable. never getting comfortable Yeah. yeah Looking to see where technology, behavior, and culture are heading before it becomes obvious to everyone else. looking to see where technology behavior and culture are heading before it becomes obvious to everyone else That instinct has shaped some of our biggest decisions over the years and enabled us to define and build for what comes next. that instinct has shaped some of our biggest decisions over the years and enabled us to define and build for what comes next What matters most in this next chapter, taste, trust, culture, has always mattered to Spotify. what matters most in this next chapter taste trust culture has always mattered to spotify It is why we exist. It is where we succeed, and it is what we will continue building for. It is why we exist. it is why we exist It is where we succeed, and it is what we will continue building for. it is where we succeed and it is what we will continue building for

Speaker 6: That's what helped us build lasting differentiation, increase our engagement, and evolve the business over time to not only meet, but actually exceed the expectations of our hundreds of millions of users. Remember, we started with access, we moved to personalization, and now we're going into generation. Each of these transitions has expanded what Spotify can become. Every time, our advantage has compounded because the generative era rewards scale, data, and deep user understanding more than any era before it. What excites us most about this journey isn't any single feature. It's the entire foundation underneath it all. We're very proud of what we built, and we're very proud of the teams that you've met today. We're even more excited about the next 20 years. That's what helped us build lasting differentiation, increase our engagement, and evolve the business over time to not only meet, but actually exceed the expectations of our hundreds of millions of users. that's what helped us build lasting differentiation increase our engagement and evolve the business over time to not only meet but actually exceed the expectations of our hundreds of millions of users Remember, we started with access, we moved to personalization, and now we're going into generation. remember we started with access we moved to personalization and now we're going into generation Each of these transitions has expanded what Spotify can become. each of these transitions has expanded what spotify can become Every time, our advantage has compounded because the generative era rewards scale, data, and deep user understanding more than any era before it. every time our advantage has compounded because the generative era rewards scale data and deep user understanding more than any era before it What excites us most about this journey isn't any single feature. what excites us most about this journey isn't any single feature It's the entire foundation underneath it all. it's the entire foundation underneath it all We're very proud of what we built, and we're very proud of the teams that you've met today. we're very proud of what we built and we're very proud of the teams that you've met today We're even more excited about the next 20 years. we're even more excited about the next 20 years We will continue to raise our ambitions. Thank you. Now let's take some of your questions. W e will continue to raise our ambitions. w e will continue to raise our ambitions Thank you. thank you Now let's take some of your questions. now let's take some of your questions

Speaker 2: All right. Thanks, Alex and Gustav. We are going to start the Q&A session. We're going to take questions from the room. We'll call on you. We'll have mics circulating. Please introduce yourself and your firm name. We ask that you please limit yourself to one question so we can get in as many as possible. Why don't we start with the first one here from Steven Cahall. All right. all right Thanks, Alex and Gustav. thanks alex and gustav We are going to start the Q&A session. we are going to start the q&a session We're going to take questions from the room. we're going to take questions from the room We'll call on you. we'll call on you We'll have mics circulating. we'll have mics circulating Please introduce yourself and your firm name. please introduce yourself and your firm name We ask that you please limit yourself to one question so we can get in as many as possible. we ask that you please limit yourself to one question so we can get in as many as possible Why don't we start with the first one here from Steven Cahall. why don't we start with the first one here from steven cahall

Speaker 22: Do I need a microphone? Do I need a microphone? do i need a microphone

Speaker 2: Microphone's coming over here. Microphone's coming over here. microphone's coming over here

Speaker 22: Thank you. Steven Cahall from Wells Fargo. I know there's going to be a bunch of questions around the UMG deal that you announced and the ability to create AI music. Let me see if I can just cover all of those in one giant question. Thank you. thank you Steven Cahall from Wells Fargo. steven cahall from wells fargo I know there's going to be a bunch of questions around the UMG deal that you announced and the ability to create AI music. i know there's going to be a bunch of questions around the umg deal that you announced and the ability to create ai music Let me see if I can just cover all of those in one giant question. let me see if i can just cover all of those in one giant question

Speaker 6: Thank you. Let's try. Thank you. thank you Let's try. let's try

Speaker 22: Yeah. Wondering how you're thinking about pricing for this add-on? How should we think about how it impacts your gross margins? Will this be rolled out globally? Do you see this as paving the way to sort of a fast follow with the other major labels? Maybe lastly, will we be able to share it on our TikTok feeds? Thanks. Yeah. yeah Wondering how you're thinking about pricing for this add-on? wondering how you're thinking about pricing for this add-on How should we think about how it impacts your gross margins? how should we think about how it impacts your gross margins Will this be rolled out globally? will this be rolled out globally Do you see this as paving the way to sort of a fast follow with the other major labels? do you see this as paving the way to sort of a fast follow with the other major labels Maybe lastly, will we be able to share it on our TikTok feeds? maybe lastly will we be able to share it on our tiktok feeds Thanks. thanks

Speaker 1: I'll start, Steve. It's a good question. Basically, you had probably 20 questions in there packed into one. I'll start, and maybe you can jump in as well. Today, this marks a landmark deal for us with UMG. I'm very pleased with where we are. We're not going to talk about the specific details of it, I'll break it down to you in at least how we're thinking about the whole sort of ambition here going forward. The first thing that we've done is basically we have created the first really legal alternative here to create remixes for fans and users to create remixes and covers. The second thing that we did here was actually to create a licensed and controlled medium for artists to actually participate in artificial intelligence. Now, we all love covers and remixes, that's proven. I'll start, Steve. i'll start steve It's a good question. it's a good question Basically, you had probably 20 questions in there packed into one. basically you had probably 20 questions in there packed into one I'll start, and maybe you can jump in as well. i'll start and maybe you can jump in as well Today, this marks a landmark deal for us with UMG. today this marks a landmark deal for us with umg I'm very pleased with where we are. i'm very pleased with where we are We're not going to talk about the specific details of it, I'll break it down to you in at least how we're thinking about the whole sort of ambition here going forward. we're not going to talk about the specific details of it i'll break it down to you in at least how we're thinking about the whole sort of ambition here going forward The first thing that we've done is b asically we have created the first really legal alternative here to create remixes for fans and users to create remixes and covers. the first thing that we've done is b asically we have created the first really legal alternative here to create remixes for fans and users to create remixes and covers The second thing that we did here was actually to create a licensed and controlled medium for artists to actually participate in artificial intelligence. the second thing that we did here was actually to create a licensed and controlled medium for artists to actually participate in artificial intelligence Now, we all love covers and remixes, that's proven. now we all love covers and remixes that's proven It's largely an untapped opportunity, because there isn't really a scaled way to make money on it. What we did today was basically to unlock that opportunity. I think this is going to be additive both to artists, songwriters, the community at large, Spotify, rights holders, and so on. We're very pleased with this. You can talk a little bit about how we plan to launch the product and so on. I want to say also that this is also the first time where Spotify does not need to have everyone to launch a product like this. That said, we don't want to leave artists and people outside of this. Of course, we're welcoming everyone and we want everyone to be part of this because we believe this is one of the greatest products we've built. It's largely an untapped opportunity, because there isn't really a scaled way to make money on it. it's largely an untapped opportunity because there isn't really a scaled way to make money on it What we did today was basically to unlock that opportunity. what we did today was basically to unlock that opportunity I think this is going to be additive both to artists, songwriters, the community at large, Spotify, rights holders, and so on. i think this is going to be additive both to artists songwriters the community at large spotify rights holders and so on We're very pleased with this. we're very pleased with this You can talk a little bit about how we plan to launch the product and so on. you can talk a little bit about how we plan to launch the product and so on I want to say also that this is also the first time where Spotify does not need to have everyone to launch a product like this. i want to say also that this is also the first time where spotify does not need to have everyone to launch a product like this That said, we don't want to leave artists and people outside of this. that said we don't want to leave artists and people outside of this Of course, we're welcoming everyone and we want everyone to be part of this because we believe this is one of the greatest products we've built. of course we're welcoming everyone and we want everyone to be part of this because we believe this is one of the greatest products we've built

Speaker 6: It's pretty unique for us to not actually need everyone to get started. We're excited about the opportunity. A couple of more things. We don't want to go into the economics, but you should expect this to be at least moderately neutral to accretive to us. We just don't do deals that are bad for any of us, which is one of the reasons why we spend so much time on getting these deals right. A couple of things that I think are important is the incentives here. So far, AI music has mostly been about net new music, right? Meaning when you create a song that didn't exist before. Those can be new creators, those can be existing creators using those tools. It's pretty unique for us to not actually need everyone to get started. it's pretty unique for us to not actually need everyone to get started We're excited about the opportunity. A couple of more things. we're excited about the opportunity. a couple of more things We don't want to go into the economics, but you should expect this to be at least moderately neutral to accretive to us. we don't want to go into the economics but you should expect this to be at least moderately neutral to accretive to us We just don't do deals that are bad for any of us, which is one of the reasons why we spend so much time on getting these deals right. we just don't do deals that are bad for any of us which is one of the reasons why we spend so much time on getting these deals right A couple of things that I think are important is the incentives here. a couple of things that i think are important is the incentives here So far, AI music has mostly been about net new music, right? so far ai music has mostly been about net new music right Meaning when you create a song that didn't exist before. meaning when you create a song that didn't exist before Those can be new creators, those can be existing creators using those tools. those can be new creators those can be existing creators using those tools Largely, existing catalogs and creators with most existing catalogs have been left out completely. It's really only about replacement for them. We think net new music is happening. There are many companies doing this. This music gets uploaded to Spotify. That is happening. This other part was just not going to happen without us. It would not happen by itself because, as Alex said, there was no legal framework. We think the opportunity is very large. If you look at other media types, existing IP in TV and movies is usually considered the most valuable rather than the least valuable. As Alex said, you can see artists doing remixes and covers today manually because it is a way for them to get rediscovered and get more stream share. Largely, existing catalogs and creators with most existing catalogs have been left out completely. largely existing catalogs and creators with most existing catalogs have been left out completely It's really only about replacement for them. it's really only about replacement for them We think net new music is happening. we think net new music is happening There are many companies doing this. there are many companies doing this This music gets uploaded to Spotify. this music gets uploaded to spotify That is happening. that is happening This other part was just not going to happen without us. this other part was just not going to happen without us It would not happen by itself because, as Alex said, there was no legal framework. it would not happen by itself because as alex said there was no legal framework We think the opportunity is very large. we think the opportunity is very large If you look at other media types, existing IP in TV and movies is usually considered the most valuable rat her than the l east valuable. if you look at other media types existing ip in tv and movies is usually considered the most valuable rat her than the l east valuable As Alex said, you can see artists doing remixes and covers today manually because it is a way for them to get rediscovered and get more stream share. as alex said you can see artists doing remixes and covers today manually because it is a way for them to get rediscovered and get more stream share

Speaker 1: Typically, one song can become maybe three remixes or four remixes and maybe even five covers. With this, one song becomes 10,000 songs, 100,000 songs, paying tribute you know, being playful with the original. Typically, one song can become maybe three remixes or four remixes and maybe even five covers. typically one song can become maybe three remixes or four remixes and maybe even five covers With this, one song becomes 10,000 songs, 100,000 songs, paying tribute you know, being playful with the original. with this one song becomes 10,000 songs 100,000 songs paying tribute you know being playful with the original

Speaker 6: I think that's important because if you look, why would people want to do this on Spotify? If it's about getting a share of the revenue pool, you want to get the largest share of the largest revenue pool. We are by far the largest revenue pool. We think this is what we should do and what we're going to do better than anyone else. To answer some of your other questions, creation will be an add-on. You will be able to do some creation in Premium and so forth. As you know, Alex here has worked for, what is it, 17 years on finding the perfect conversion points between free to Premium to the next. We're going to find the right conversion points, but creation is a Premium add-on. I think that's important because if you look, why would people want to do this on Spotify? i think that's important because if you look why would people want to do this on spotify If it's about getting a share of the revenue pool, you want to get the largest share of the largest revenue pool. if it's about getting a share of the revenue pool you want to get the largest share of the largest revenue pool We are by far the largest revenue pool. we are by far the largest revenue pool We think this is what we should do and what we're going to do better than anyone else. we think this is what we should do and what we're going to do better than anyone else To answer some of your other questions, creation will be an add-on. to answer some of your other questions creation will be an add-on You will be able to do some creation in Premium and so forth. you will be able to do some creation in premium and so forth As you know, Alex here has worked for, what is it, 17 years on finding the perfect conversion points between free to Premium to the next. as you know alex here has worked for what is it 17 years on finding the perfect conversion points between free to premium to the next We're going to find the right conversion points, but creation is a Premium add-on. we're going to find the right conversion points but creation is a premium add-on Consumption is not a Premium add-on. Anyone on Spotify, Premium and free, can consume. I think it's very important that if you take the time to create a cover or remix that you love, you can share it with anyone. Because the free tier is free, literally anyone can consume. All you have to do is to install Spotify Free to hear it. Consumption is not a Premium add-on. consumption is not a premium add-on Anyone on Spotify, Premium and free, can consume. anyone on spotify premium and free can consume I think it's very important that if you take the time to create a cover or re mix that you love, you can share it with anyone. i think it's very important that if you take the time to create a cover or re mix that you love you can share it with anyone Because the free tier is free, literally anyone can consume. because the free tier is free literally anyone can consume All you have to do is to install Spotify Free to hear it. all you have to do is to install spotify free to hear it

Speaker 1: You think about the catalog as one that's going to not just expand but multiply. With that comes usage, with that comes monetization and further unlocks. You think about the catalog as one that's going to not just expand but multiply. you think about the catalog as one that's going to not just expand but multiply With that comes usage, with that comes monetization and further unlocks. with that comes usage with that comes monetization and further unlocks

Speaker 2: Right. Did you get some answers at least to the 20 questions? Good. All right. Thanks, Steve. Let's go next one right here in the front. Rich? Right. right Did you get some answers at least to the 20 questions? did you get some answers at least to the 20 questions Good. good All right. all right Thanks, Steve. thanks steve Let's go next one right here in the front. let's go next one right here in the front Rich? rich

Speaker 19: Since that was 17 parts, I'm going to ask two. OpenAI believes in two to three years, we're going to go to an agentic world. No one's going to use apps. Apps will fade away. I don't really understand why I would use OpenAI to listen or watch music, given everything you just showed on stage here today. They obviously have a biased view, I'm just curious, not just OpenAI, but just the LLMs and foundational models in general. What is that tension, who owns the customer, and how do you think about playing in that world of LLMs over time? Is that a risk or a tailwind, how do you think about it? Just two, because I've really been thinking about it this whole meeting. Since that was 17 parts, I'm going to ask two. since that was 17 parts i'm going to ask two OpenAI believes in two to three years, we're going to go to an agentic world. openai believes in two to three years we're going to go to an agentic world No one's going to use apps. no one's going to use apps Apps will fade away. apps will fade away I don't really understand why I would use OpenAI to listen or watch music, given everything you just showed on stage here today. i don't really understand why i would use openai to listen or watch music given everything you just showed on stage here today They obviously have a biased view, I'm just curious, not just OpenAI, but just the LLMs and foundational models in general. they obviously have a biased view i'm just curious not just openai but just the llms and foundational models in general What is that tension, who ow ns the customer, and how do you think about playing in that world of LLMs over time? what is that tension who ow ns the customer and how do you think about playing in that world of llms over time Is that a risk or a tailwind, how do you think about it? is that a risk or a tailwind how do you think about it Just two, because I've really been thinking about it this whole meeting. just two because i've really been thinking about it this whole meeting The ticket thing is a really interesting take on giving fans tickets. Obviously, a small number of tickets, but if I am a free user, I upgrade to Premium, and then I find out I don't get my Taylor Swift ticket. How do you not get pissed off Premium subscribers? Thank you. The ticket thing is a really interesting take on giving fans tickets. the ticket thing is a really interesting take on giving fans tickets Obviously, a small number of tickets, but if I am a free user, I upgrade to Premium, and then I find out I don't get my Taylor Swift ticket. obviously a small number of tickets but if i am a free user i upgrade to premium and then i find out i don't get my taylor swift ticket How do you not get pissed off Premium subscribers? how do you not get pissed off premium subscribers Thank you. thank you

Speaker 6: I can start with the second one first, actually, if you want to. People usually only remember the second one. The way we think about tickets and Premium is there's never going to be enough tickets for everyone in Premium because the arenas have a finite amount of space. We are talking about us holding millions of tickets. This is not a small lottery or something. We'll make a lot of people very happy. There was never enough space. The problem was there was never enough space, and it was deeply unfair who got that space, right? It was the scalpers. It was the one with the most money. What we are doing is we're bringing fairness to this, right? We're taking the actual fans to get those tickets. That's how we're thinking about it. I can start with the second one first, actually, if you want to. i can start with the second one first actually if you want to People usually only remember the second one. people usually only remember the second one The way we think about tickets and Premium is there's never going to be enough tickets for everyone in Premium because the arenas have a finite amount of space. the way we think about tickets and premium is there's never going to be enough tickets for everyone in premium because the arenas have a finite amount of space We are talking about us holding millions of tickets. we are talking about us holding millions of tickets T his is not a small lottery or something. t his is not a small lottery or something We'll make a lot of people very happy. we'll make a lot of people very happy There was never enough space. there was never enough space The problem was there was never enough space, and it was deeply unfair who got that space, right? the problem was there was never enough space and it was deeply unfair who got that space right It was the scalpers. it was the scalpers It was the one with the most money. it was the one with the most money What we are doing is we're bringing fairness to this, right? what we are doing is we're bringing fairness to this right We're taking the actual fans to get those tickets. we're taking the actual fans to get those tickets That's how we're thinking about it. that's how we're thinking about it It's also important to remember that you are not paying for this. You just get it in Premium, right? I think if you were paying extra for this and you haven't got it, that's very different. You are not paying extra. It's also important to remember that you are not paying for this. it's also important to remember that you are not paying for this You just get it in Premium, right? you just get it in premium right I think if you were paying extra for this and you haven't got it, that's very different. i think if you were paying extra for this and you haven't got it that's very different You are not paying extra. you are not paying extra

Speaker 1: You're paying for the tickets, but you're not paying for the reservation. You're paying for the tickets, but you're not paying for the reservation. you're paying for the tickets but you're not paying for the reservation

Speaker 6: We think people will be very happy about this because it's something they just get, and two, we bring fairness to this system. We think people will be very happy about this because it's something they just get, and two, we bring fairness to this system. we think people will be very happy about this because it's something they just get and two we bring fairness to this system

Speaker 1: Frankly, this is one of the most lovely improvements to Spotify Premium since our founding. It truly is, right? We know this because we've done our research around this and tested it with some people. Because of the scale, we can get very, very precise on what people enjoy or not. Even you asking that question straight out and, you know, is a reaction to how good this is. Frankly, this is one of the most lovely improvements to Spotify Premium since our founding. frankly this is one of the most lovely improvements to spotify premium since our founding It truly is, right? it truly is right We know this because we've done our research around this and tested it with some people. we know this because we've done our research around this and tested it with some people Because of the scale, we can get very, very precise on what people enjoy or not. because of the scale we can get very very precise on what people enjoy or not Even you asking that question straight out and, you know, is a reaction to how good this is. even you asking that question straight out and you know is a reaction to how good this is

Speaker 6: Obviously, it's not just the fans that get happy. The creators, they get very upset when their biggest fans cannot come to their shows. Everyone there gets happy. Now, I was not trying to avoid the other question. Let's go back to the other question which was, the LLM saying that all apps disappear and so forth. We obviously don't believe that all apps disappear. We do think that it's getting very cheap to write software, which is a tailwind for us that we're riding. The way we think about this, and we always have, is our ubiquity strategy. Spotify needs to be where users are. If you look at our history, I think one of our biggest success recipes has been that we always partnered. Interestingly, we always partnered with our biggest competitors. Obviously, it's not just the fans that get happy. obviously it's not just the fans that get happy The creators, they get very upset when their biggest fans cannot come to their shows. the creators they get very upset when their biggest fans cannot come to their shows Everyone there gets happy. everyone there gets happy Now, I was not trying to avoid the other question. now i was not trying to avoid the other question Let's go back to the other question which was, the LLM saying that all apps disappear and so forth. let's go back to the other question which was the llm saying that all apps disappear and so forth We obviously don't believe that all apps disappear. we obviously don't believe that all apps disappear We do think that it's getting very cheap to write software, which is a tailwind for us that we're riding. we do think that it's getting very cheap to write software which is a tailwind for us that we're riding The way we think about this, and we always have, is our ubiquity strategy. the way we think about this and we always have is our ubiquity strategy Spotify needs to be where users are. spotify needs to be where users are If you look at our history, I think one of our biggest success recipes has been that we always partnered. if you look at our history i think one of our biggest success recipes has been that we always partnered Interestingly, we always partnered with our biggest competitors. interestingly we always partnered with our biggest competitors An early landmark partnership was Facebook, now called Meta. We also partner with Google, who's one of our biggest competitors in YouTube. We partner with Apple. We partner with TikTok. We partner with everyone. The whole idea is to be where users are, right? Because there's a lot of discovery happening there. Now, to answer your question, there's also a lot of creation where people are saying, "Couldn't I make a playlist of this?" OpenAI knows that they're into this. Can they get a podcast from Spotify on that? We just see this as the next Google search. It was very important for us to rank highly on Google. It's very important for us to rank highly in these LLMs. For us, this is just more ubiquity. An early landmark partnership was Facebook, now called Meta. an early landmark partnership was facebook now called meta We also partner with Google, who's one of our biggest competitors in YouTube. we also partner with google who's one of our biggest competitors in youtube We partner with Apple. we partner with apple We partner with TikTok. we partner with tiktok We partner with everyone. we partner with everyone The whole idea is to be where users are, right? the whole idea is to be where users are right Because there's a lot of discovery happening there. because there's a lot of discovery happening there Now, to answer your question, there's also a lot of creation where people are saying, "Couldn't I make a playlist of this?" OpenAI knows that they're into this. now to answer your question there's also a lot of creation where people are saying "couldn't i make a playlist of this?" openai knows that they're into this Can they get a podcast from Spotify on that? can they get a podcast from spotify on that We just see this as the next Google search. we just see this as the next google search It was very important for us to rank highly on Google. it was very important for us to rank highly on google It's very important for us to rank highly in these LLMs. it's very important for us to rank highly in these llms For us, this is just more ubiquity. for us this is just more ubiquity Hopefully, after seeing what we did today, you understand that we feel quite comfortable about the unique advantages we have. Yes, we are great at building software and product, but we also have an enormous amount of personalization data, where the biggest companies in the world have tried to beat our personalization for soon 13 years at least, and have not. We also have enormous amounts of license data. That is the Spotify value, the personalization, and we're not giving that data away. Last, I would say Spotify was always in the background, right? We were always soundtracking all the other experiences. We were never reliant on actually being the foreground app. To soundtrack your OpenAI or Claude session, we think is actually fantastic for us. That's how we think about it. Hopefully, after seeing what we did today, you understand that we feel quite comfortable about the unique advantages we have. hopefully after seeing what we did today you understand that we feel quite comfortable about the unique advantages we have Yes, we are great at building software and product, but we also have an enormous amount of personalization data, where the biggest companies in the world have tried to beat our personalization for soon 13 years at least, and have not. yes we are great at building software and product but we also have an enormous amount of personalization data where the biggest companies in the world have tried to beat our personalization for soon 13 years at least and have not We also have enormous amounts of license data. we also have enormous amounts of license data That is the Spotify value, the personalization, and we're not giving that data away. that is the spotify value the personalization and we're not giving that data away Last, I would say Spotify was always in the background, right? last i would say spotify was always in the background right We were always soundtracking all the other experiences. we were always soundtracking all the other experiences We were never reliant on actually being the foreground app. we were never reliant on actually being the foreground app To soundtrack your OpenAI or Claude session, we think is actually fantastic for us. to soundtrack your openai or claude session we think is actually fantastic for us That's how we think about it. that's how we think about it

Speaker 2: All right. Thank you. We'll let this mic circulate. Let's go to the back here. Michael Morris? All right. all right Thank you. thank you We'll let this mic circulate. we'll let this mic circulate Let's go to the back here. Michael Morris? let's go to the back here michael morris

Speaker 12: Good afternoon. Thank you. I'm Michael Morris with Guggenheim. I wanted to ask you about the freemium funnel and the conversion. A couple questions there. First, you did enhance the functionality of the free tier last year. I'd love an update on how that's progressing with respect to what you wanted to see in the conversion to premium. The second, you made a comment earlier that AI is accelerating with faster localization and personalized services. My question there is, when we think about that conversion from free to premium, I think generally we've thought about the economic sensitivity, but apparently you see something in addition. I'd love to hear how the investments that you're making and that AI's helping with, and that localization can drive even more conversion if that's in fact what you're expecting. Good afternoon. good afternoon Thank you. thank you I'm Michael Morris with Guggenheim. i'm michael morris with guggenheim I wanted to ask you about the freemium funnel and the conversion. i wanted to ask you about the freemium funnel and the conversion A couple questions there. a couple questions there First, you did enhance the functionality of the free tier last year. first you did enhance the functionality of the free tier last year I'd love an update on how that's progressing with respect to what you wanted to see in the conversion to premium. i'd love an update on how that's progressing with respect to what you wanted to see in the conversion to premium The second, you made a comment earlier that AI is accelerating with faster localization and personalized services. the second you made a comment earlier that ai is accelerating with faster localization and personalized services My question there is, when we think about that conversion from free to premium, I think generally we've thought about the economic sensitivity, but apparently you see something in addition. my question there is when we think about that conversion from free to premium i think generally we've thought about the economic sensitivity but apparently you see something in addition I'd love to hear how the investments that you're making and that AI's helping with, and that localization can drive even more conversion if that's in fact what you're expecting. i'd love to hear how the investments that you're making and that ai's helping with and that localization can drive even more conversion if that's in fact what you're expecting

Speaker 1: I'll start with the first one. Then maybe you can jump in on the second. You heard us talk about growth, and many people have asked me throughout the years, "How do you grow Spotify? How come you guys have hundreds of millions of users and hundreds of millions of subscribers? How do you actually acquire users? What's the secret?" That second part of the question is a misunderstanding of how growth works, right? The way super scale growth works is that you actually start with engagement. You start with engagement in the way that we talked about engagement. We're not in the business of just maximizing number of minutes. We think about days in a month, which is really a proxy for contexts, right? Different contexts you're in. I'll start with the first one. i'll start with the first one Then maybe you can jump in on the second. then maybe you can jump in on the second You heard us talk about growth, and many people have asked me throughout the years, "How do you grow Spotify? you heard us talk about growth and many people have asked me throughout the years "how do you grow spotify How come you guys have hundreds of millions of users and hundreds of millions of subscribers? how come you guys have hundreds of millions of users and hundreds of millions of subscribers How do you actually acquire users? how do you actually acquire users What's the secret?" That second part of the question is a misunderstanding of how growth works, right? what's the secret?" that second part of the question is a misunderstanding of how growth works right The way super scale growth works is that you actually start with engagement. the way super scale growth works is that you actually start with engagement You start with engagement in the way that we talked about engagement. you start with engagement in the way that we talked about engagement We're not in the business of just maximizing number of minutes. we're not in the business of just maximizing number of minutes We think about days in a month, which is really a proxy for contexts, right? we think about days in a month which is really a proxy for contexts right Different contexts you're in. different contexts you're in If we can be in as many contexts as possible, being as many days as possible in a month, then that's the right engagement. Any product we build or develop starts with us thinking about how can we get you to interact with us more days in a meaningful way. The new free tier addresses exactly that. What you're seeing basically is not just, in the years prior, where we have consistently increased engagement across these axes of days and devices and verticals. What you're seeing basically is us taking a step change. That's why you've seen us in some earnings calls, we've been talking about how we've been beating the MAU growth, versus even our own expectations really. That's the result of improving the free tier. If we can be in as many contexts as possible, being as many days as possible in a month, then that's the right engagement. if we can be in as many contexts as possible being as many days as possible in a month then that's the right engagement Any product we build or develop starts with us thinking about how can we get you to interact with us more days in a meaningful way. any product we build or develop starts with us thinking about how can we get you to interact with us more days in a meaningful way The new free tier addresses exactly that. the new free tier addresses exactly that What you're seeing basically is not just, in the years prior, where we have consistently increased engagement across these axes of days and devices and verticals. what you're seeing basically is not just in the years prior where we have consistently increased engagement across these axes of days and devices and verticals What you're seeing basically is us taking a step change. what you're seeing basically is us taking a step change That's why you've seen us in some earnings calls, we've been talking about how we've been beating the MAU growth, versus even our own expectations really. that's why you've seen us in some earnings calls we've been talking about how we've been beating the mau growth versus even our own expectations really That's the result of improving the free tier. that's the result of improving the free tier Once we have people on the Free tier, you know exactly as I, that what we focus on is actually to build out the differentiated proposition of Premium to get them to come on board, right, and come on board the paid experience. That is also why I think you've seen some of the stuff today, like Reserves for instance, that someone here asked about and so on. Those are all investments into making Premium even more sticky and the conversion from Free happen in a much more sort of pre- scaled way. Once we have people on the Free tier, you know exactly as I, that what we focus on is actually to build out the differentiated proposition of Premium to get them to come on board, right, and come on board the paid experience. once we have people on the free tier you know exactly as i that what we focus on is actually to build out the differentiated proposition of premium to get them to come on board right and come on board the paid experience That is also why I think you've seen some of the stuff today, like Reserves for instance, that someone here asked about and so on. that is also why i think you've seen some of the stuff today like reserves for instance that someone here asked about and so on Those are all investments into making Premium even more sticky and the conversion from Free happen in a much more sort of pre- scaled way. those are all investments into making premium even more sticky and the conversion from free happen in a much more sort of pre- scaled way

Speaker 6: Can I ask you on the other question you had about AI and free, can you repeat that? I'm not sure I understand exactly. Can I ask you on the other question you had about AI and free, can you repeat that? can i ask you on the other question you had about ai and free can you repeat that I'm not sure I understand exactly. i'm not sure i understand exactly

Speaker 12: Sure. I'd like to understand the conversion of free to premium and the potential for that conversion to become stronger as a result of what you described as the faster localization and personalization by AI. Sure. sure I'd like to understand the conversion of free to premium and the potential for that conversion to become stronger as a result of what you described as the faster localization and personalization by AI. i'd like to understand the conversion of free to premium and the potential for that conversion to become stronger as a result of what you described as the faster localization and personalization by ai

Speaker 6: Sure. Sure. As Alex said, Alex comes from the gaming business. Sure. sure Sure. sure As Alex said, Alex comes from the gaming business. as alex said alex comes from the gaming business

Speaker 1: That was many years ago. That was 20 years ago. That was many years ago. that was many years ago That was 20 years ago. that was 20 years ago

Speaker 6: Did I? Did I? did i

Speaker 1: Yes. Yes. yes

Speaker 6: What you know there is you need to start with engagement, as you said. What we've said for now at least the 17 or maybe 18 years I've been here, is that the only thing that was very predictive of how much you're going to pay is how much you play on the free tier. More engagement drives more conversion, which is a shock to some people because they think you should cap the experience and push people over. That's the wrong way to think about it. You're not going to start paying for something you don't use. You need to first use it all the time, and then you need to find good pay gates. Like for example, you don't want the ads anymore, you want on-demand, you want offline and so forth. What you know there is you need to start with engagement, as you said. what you know there is you need to start with engagement as you said What we've said for now at least the 17 or maybe 18 years I've been here, is that the only thing that was very predictive of how much you're going to pay is how much you play on the free tier. what we've said for now at least the 17 or maybe 18 years i've been here is that the only thing that was very predictive of how much you're going to pay is how much you play on the free tier More engagement drives more conversion, which is a shock to some people because they think you should cap the experience and push people over. more engagement drives more conversion which is a shock to some people because they think you should cap the experience and push people over That's the wrong way to think about it. that's the wrong way to think about it You're not going to start paying for something you don't use. you're not going to start paying for something you don't use You need to first use it all the time, and then you need to find good pay gates. you need to first use it all the time and then you need to find good pay gates Like for example, you don't want the ads anymore, you want on-demand, you want offline and so forth. like for example you don't want the ads anymore you want on-demand you want offline and so forth We need to get people deeply engaged. First, you need to get them to care deeply, then you ask them to pay. The key driver to that engagement is personalization. We see it clear as day. I showed you the metrics. We increase personalization, you listen more. Your propensity to say, "This is actually worth EUR 6.99," goes up. It is a very direct relationship. The more you play, the more you pay. We still need to have good pay gates and as you know, we pay gate on functionality, not on content. You have the same content in Free and Premium, and that's so that we can get you as engaged as possible. We need to get people deeply engaged. we need to get people deeply engaged First, you need to get them to care deeply, then you ask them to pay. first you need to get them to care deeply then you ask them to pay The key driver to that engagement is personalization. the key driver to that engagement is personalization We see it clear as day. we see it clear as day I showed you the metrics. i showed you the metrics We increase personalization, you listen more. we increase personalization you listen more Your propensity to say, "This is actually worth EUR 6.99," goes up. your propensity to say "this is actually worth eur 6.99," goes up It is a very direct relationship. it is a very direct relationship The more you play, the more you pay. the more you play the more you pay We still need to have good pay gates and as you know, we pay gate on functionality, not on content. we still need to have good pay gates and as you know we pay gate on functionality not on content You have the same content in Free and Premium, and that's so that we can get you as engaged as possible. you have the same content in free and premium and that's so that we can get you as engaged as possible

Speaker 1: The localization bit is obviously a balance that we strike between a number of different things. One is language, of course, which has never been very costly, but something that's just simply is much faster and much better. Right? You no longer have broken sentences in Finnish and in Hindi and so on. That's immediately addressed and something that is hygiene. Number two is culture, of course. There we have actually great signals from our teams around the world, the editorial teams that we also talked about, how that kind of feeds back into the model and helps us personalize even better. Really the content signals and the cultural signals that are coming in from the outside feeds our Large Taste Model even further, which then gives you that upside on personalization which then gives you that additional engagement, and then gives you the conversion. The localization bit is obviously a balance that we strike between a number of different things. the localization bit is obviously a balance that we strike between a number of different things One is language, of course, which has never been very costly, but something that's just simply is much faster and much better. one is language of course which has never been very costly but something that's just simply is much faster and much better Right? right You no longer have broken sentences in Finnish and in Hindi and so on. you no longer have broken sentences in finnish and in hindi and so on That's immediately addressed and something that is hygiene. that's immediately addressed and something that is hygiene Number two is culture, of course. number two is culture of course There we have actually great signals from our teams around the world, the editorial teams that we also talked about, how that kind of feeds back into the model and helps us personalize even better. there we have actually great signals from our teams around the world the editorial teams that we also talked about how that kind of feeds back into the model and helps us personalize even better Really the content signals and the cultural signals that are coming in from the outside feeds our Large Taste Model even further, which then gives you that upside on personalization which then gives you that additional engagement, and then gives you the conversion. really the content signals and the cultural signals that are coming in from the outside feeds our large taste model even further which then gives you that upside on personalization which then gives you that additional engagement and then gives you the conversion

Speaker 6: There's one more concrete example that I think is important. I just said that we need to get you engaged, and to get you engaged, we need to personalize, but then we need to understand what you're into. For a long time, we worked with onboarding flows. You would click, "I'm into these artists," and so forth, which had some efficiency, but mostly you just had to use it. You had to use it a lot before we started to understand who you were, because we only had a few skips. In the previous free tier, we didn't even have on-demand, so it was a pretty weak signal. We suggested something, and maybe you skipped. It took a long time to understand who you were. There's one more concrete example that I think is important. there's one more concrete example that i think is important I just said that we need to get you engaged, and to get you engaged, we need to personalize, but then we need to understand what you're into. i just said that we need to get you engaged and to get you engaged we need to personalize but then we need to understand what you're into For a long time, we worked with onboarding flows. for a long time we worked with onboarding flows You would click, "I'm into these artists," and so forth, which had some efficiency, but mostly you just had to use it. you would click "i'm into these artists," and so forth which had some efficiency but mostly you just had to use it You had to use it a lot before we started to understand who you were, because we only had a few skips. you had to use it a lot before we started to understand who you were because we only had a few skips In the previous free tier, we didn't even have on-demand, so it was a pretty weak signal. in the previous free tier we didn't even have on-demand so it was a pretty weak signal We suggested something, and maybe you skipped. we suggested something and maybe you skipped It took a long time to understand who you were. it took a long time to understand who you were What is interesting with the localization of AI is now we can ask you in English, just tell us, just spend five minutes in English writing who you are and what you like. Now we can deeply personalize to you very quickly. That's another clear example of the fact that we can now act in many languages means that we can personalize much, much faster. What is interesting with the localization of AI is now we can ask you in English, just tell us, just spend five minutes in English writing who you are and what you like. what is interesting with the localization of ai is now we can ask you in english just tell us just spend five minutes in english writing who you are and what you like Now we can deeply personalize to you very quickly. now we can deeply personalize to you very quickly That's another clear example of the fact that we can now act in many languages means that we can personalize much, much faster. that's another clear example of the fact that we can now act in many languages means that we can personalize much much faster

Speaker 2: All right. We've got time for one or two more. Why don't we go here in the middle with Jessica? All right. all right We've got time for one or two more. we've got time for one or two more Why don't we go here in the middle with Jessica? why don't we go here in the middle with jessica

Speaker 7: Thanks. Jessica Reif Ehrlich from BofA Securities. There were so many products introduced today, which is a bit of a surprise obviously all about driving engagement and monetization. Just wondering, you didn't say anything about pricing, if you could say anything about how you're pricing these tiers, what's your philosophy? Will you have multiple super premium tiers at different price points rolling? How do you think about it globally? On the engagement side, you talked about it's basically every day people are on. Almost every day. What can you say about the daily use engagement? Is it two hours? It just drives everything, not just staying on the platform, it just drives advertising as well. Thanks. thanks Jessica Reif Ehrlich from BofA Securities. jessica reif ehrlich from bofa securities There were so many products introduced today, which is a bit of a surprise obviously all about driving engagement and monetization. there were so many products introduced today which is a bit of a surprise obviously all about driving engagement and monetization Just wondering, you didn't say anything about pricing, if you could say anything about how you're pricing these tiers, what's your philosophy? just wondering you didn't say anything about pricing if you could say anything about how you're pricing these tiers what's your philosophy Will you have multiple super premium tiers at different price points rolling? will you have multiple super premium tiers at different price points rolling How do you think about it globally? how do you think about it globally On the engagement side, you talked about it's basically every day people are on. on the engagement side you talked about it's basically every day people are on Almost every day. almost every day What can you say about the daily use engagement? what can you say about the daily use engagement Is it two hours? is it two hours It just drives everything, not just staying on the platform, it just drives advertising as well. it just drives everything not just staying on the platform it just drives advertising as well

Speaker 1: Yeah. Okay. Let me see there. You had a couple of different questions in there. I'll bring you back to something that we've said many times before. The one thing that we tracked very closely is what we call value to price. All the way from basically the founding of Spotify until 15, 16 years later, we just focused on the value, not so much the price. Value over price just went up and up and up and up. Spotify became the greatest music product in the world as a result of that. Now, something else actually happened, and that's that we created these plans, these multi-account plans. That actually pushed price down slightly. What you had was basically a ratio that just skyrocketed. Both the numerator was going up, and the denominator was going down. Yeah. yeah Okay. okay Let me see there. let me see there You had a couple of different questions in there. you had a couple of different questions in there I'll bring you back to something that we've said many times before. i'll bring you back to something that we've said many times before The one thing that we tracked very closely is what we call value to price. the one thing that we tracked very closely is what we call value to price All the way from basically the founding of Spotify until 15, 16 years later, we just focused on the value, not so much the price. all the way from basically the founding of spotify until 15 16 years later we just focused on the value not so much the price Value over price just went up and up and up and up. value over price just went up and up and up and up Spotify became the greatest music product in the world as a result of that. spotify became the greatest music product in the world as a result of that Now, something else actually happened, and that's that we created these plans, these multi-account plans. now something else actually happened and that's that we created these plans these multi-account plans That actually pushed price down slightly. that actually pushed price down slightly What you had was basically a ratio that just skyrocketed. what you had was basically a ratio that just skyrocketed Both the numerator was going up, and the denominator was going down. both the numerator was going up and the denominator was going down It's a good recipe for increasing the ratio of something. What then happened, if we take ourselves back three years, we started raising price. That value to price came down slightly without really a big loss of subscribers. Rather the opposite. Even us, we were surprised that the churn was so minimal. Then we went back, we invested more into value, we did another price increase, it dropped again, we increased more in value. What used to be just a straight line of value to price increasing has now become a more moderated, sort of almost like a up and down sine curve that's sort of pointing into the future. The way we think about it in the end is that the consumer or the subscriber user should always win. That is our focus. It's a good recipe for increasing the ratio of something. it's a good recipe for increasing the ratio of something What then happened, if we take ourselves back three years, we started raising price. what then happened if we take ourselves back three years we started raising price That value to price came down slightly without really a big loss of subscribers. that value to price came down slightly without really a big loss of subscribers Rather the opposite. rather the opposite Even us, we were surprised that the churn was so minimal. even us we were surprised that the churn was so minimal Then we went back, we invested more into value, we did another price increase, it dropped again, we increased more in value. then we went back we invested more into value we did another price increase it dropped again we increased more in value What used to be just a straight line of value to price increasing has now become a more moderated, sort of almost like a up and down sine curve that's sort of pointing into the future. what used to be just a straight line of value to price increasing has now become a more moderated sort of almost like a up and down sine curve that's sort of pointing into the future The way we think about it in the end is that the consumer or the subscriber user should always win. the way we think about it in the end is that the consumer or the subscriber user should always win That is our focus. that is our focus We will monetize when we need to so that we can invest back into differentiation for the whole ecosystem, not just Spotify Premium, but also free. Now, when it comes to different add-ons, you can actually look at Spotify Premium as almost like a mosaic of different niche audiences. 300 million of them. We talked about the power law usage curve, demand curve earlier today. That has opened up our eyes tremendously as we've scaled. What used to be a niche audience that we had, which was thousands of people, we were never interested in building a product to harvest that or to convert that person. It's too small. Even the smallest niches are now in the millions for us. We will monetize when we need to so that we can invest back into differentiation for the whole ecosystem, not just Spotify Premium, but also free. we will monetize when we need to so that we can invest back into differentiation for the whole ecosystem not just spotify premium but also free Now, when it comes to different add-ons, you can actually look at Spotify Premium as almost like a mosaic of different niche audiences. 300 million of them. now when it comes to different add-ons you can actually look at spotify premium as almost like a mosaic of different niche audiences 300 million of them We talked about the power law usage curve, demand curve earlier today. we talked about the power law usage curve demand curve earlier today That has opened up our eyes tremendously as we've scaled. that has opened up our eyes tremendously as we've scaled What used to be a niche audience that we had, which was thousands of people, we were never interested in building a product to harvest that or to convert that person. what used to be a niche audience that we had which was thousands of people we were never interested in building a product to harvest that or to convert that person It's too small. it's too small Even the smallest niches are now in the millions for us. even the smallest niches are now in the millions for us For us, it makes a lot of sense to look at this demand, this specific niche demand, and then we create specific products for them to engage more and then monetize more. That really is how we think about it. This next era is going to be about the segmentation of our 300 million strong and growing subscriber base. For us, it makes a lot of sense to look at this demand, this specific niche demand, and then we create specific products for them to engage more and then monetize more. for us it makes a lot of sense to look at this demand this specific niche demand and then we create specific products for them to engage more and then monetize more That really is how we think about it. that really is how we think about it This next era is going to be about the segmentation of our 300 million strong and growing subscriber base. this next era is going to be about the segmentation of our 300 million strong and growing subscriber base

Speaker 6: Instead of thinking about it as one add-on tier, like the sub-premium idea, just think of it as audiobooks as a sub-premium for super audiobooks fans. We just presented a personal podcast add-on. We also presented a creator add-on. It's just many of them. The whole point of super fan engagement is that everyone is not a super fan. There are going to be multiple add-on products that are priced, as you can see with Audiobooks Plus, you kind of gave away, there are going to be Audiobooks Plus, Plus, because the engagement in there differs, right? You're going to see multiple of them priced for those segments. Some more expensive because there's more willingness to pay, some slightly less. Instead of thinking about it as one add-on tier, like the sub-premium idea, just think of it as audiobooks as a sub-premium for super audiobooks fans. instead of thinking about it as one add-on tier like the sub-premium idea just think of it as audiobooks as a sub-premium for super audiobooks fans We just presented a personal podcast add-on. we just presented a personal podcast add-on We also presented a creator add-on. we also presented a creator add-on It's just many of them. it's just many of them The whole point of super fan engagement is that eve ryone is not a super fan. the whole point of super fan engagement is that eve ryone is not a super fan There are going to be multiple add-on products that are priced, as you can see with Audiobooks Plus, you kind of gave away, there are going to be Audiobooks Plus, Plus, because the engagement in there differs, right? there are going to be multiple add-on products that are priced as you can see with audiobooks plus you kind of gave away there are going to be audiobooks plus plus because the engagement in there differs right You're going to see multiple of them priced for those segments. you're going to see multiple of them priced for those segments Some more expensive because there's more willingness to pay, some slightly less. some more expensive because there's more willingness to pay some slightly less

Speaker 1: That's right. Next. That's right. that's right Next. next

Speaker 2: Great. Okay. We've got time for one last question. Let's go over here to Justin. There you go. Justin. Great. great Okay. okay We've got time for one last question. we've got time for one last question Let's go over here to Justin. let's go over here to justin There you go. there you go Justin. justin

Speaker 9: All right. Thank you. Justin Patterson from KeyBanc. I wanted to go back to just touching on taste a little bit more. You mentioned Studio by Spotify Labs. That seems like something that really broadens your corpus of information about the user and feeds into the broader AI personalization. Just would love to hear more about how you're really positioning the app going forward to ingest more of this data and take people through what sounds like it's going to be a more complex user experience. Just making sure you're taking that good signal from the user and then surfacing the right information at the right time to keep growing more of those moments each day. Thank you. All right. all right Thank you. thank you Justin Patterson from KeyBanc. justin patterson from keybanc I wanted to go back to just touching on taste a little bit more. i wanted to go back to just touching on taste a little bit more You mentioned Studio by Spotify Labs. you mentioned studio by spotify labs That seems like something that really broadens your corpus of information about the user and feeds into the broader AI personalization. that seems like something that really broadens your corpus of information about the user and feeds into the broader ai personalization Just would love to hear more about how you're really positioning the app going forward to ingest more of this data and take people through what sounds like it's going to be a more complex user experience. just would love to hear more about how you're really positioning the app going forward to ingest more of this data and take people through what sounds like it's going to be a more complex user experience Just making sure you're taking that good signal from the user and then surfacing the right information at the right time to keep growing more of those moments each day. just making sure you're taking that good signal from the user and then surfacing the right information at the right time to keep growing more of those moments each day Thank you. thank you

Speaker 6: Yeah. Yes, we are very excited about the fact that it's so easy and cheap for us now to learn much more about the user. This is why I said one way to think about generative era is that computers understand English. I've been doing deep user research interviews with 10 users for the last 17 years trying to understand them deeply and then saying, based on these 10 users, let's guess that the other 599 million are similar, which is not true. Now we can do a deep user research interview with every user, every day, because they're talking to an LLM. That makes me very excited. This is truly deep personalization. What is interesting, though, that we see with the DJ and from the playlist, people are telling us enormous amounts of things about their lives, right? Yeah. yeah Yes, we are very excited about the fact that it's so easy and cheap for us now to learn much more about the user. yes we are very excited about the fact that it's so easy and cheap for us now to learn much more about the user This is why I said one way to think about generative era is that computers understand English. this is why i said one way to think about generative era is that computers understand english I've been doing deep user research interviews with 10 users for the last 17 years trying to understand them deeply and then saying, based on these 10 users, let's guess that the other 599 million are similar, which is not true. i've been doing deep user research interviews with 10 users for the last 17 years trying to understand them deeply and then saying based on these 10 users let's guess that the other 599 million are similar which is not true Now we can do a deep user research interview with every user, every day, because they're talking to an LLM. now we can do a deep user research interview with every user every day because they're talking to an llm That makes me very excited. that makes me very excited This is truly deep personalization. this is truly deep personalization What is interesting, though, that we see with the DJ and from the playlist, people are telling us enormous amounts of things about their lives, right? what is interesting though that we see with the dj and from the playlist people are telling us enormous amounts of things about their lives right When they're asking for podcasts, when they're going for a run, when they're asking for books, we learn so much more about them. All of a sudden, this data that maybe only Google had, we're getting an enormous amount of this. We're starting to learn a lot more about our users. Now, as you said, with Studio by Spotify and also what Maya showed, personal podcast, people are now starting to upload PDFs and personal content. We only had public content before. We are very quickly learning much, much, much more about our user base. That makes us very excited. We think we have a very big potential there. I want to touch on the other question you have of complexity. When they're asking for podcasts, when they're going for a run, when they're asking for books, we learn so much more about them. when they're asking for podcasts when they're going for a run when they're asking for books we learn so much more about them All of a sudden, this data that maybe only Google had, we're getting an enormous amount of this. all of a sudden this data that maybe only google had we're getting an enormous amount of this We're starting to learn a lot more about our users. we're starting to learn a lot more about our users Now, as you said, with Studio by Spotify and also what Maya showed, personal podcast, people are now starting to upload PDFs and personal content. now as you said with studio by spotify and also what maya showed personal podcast people are now starting to upload pdfs and personal content We only had public content before. we only had public content before We are very quickly learning much, much, much more about our user base. we are very quickly learning much much much more about our user base That makes us very excited. that makes us very excited We think we have a very big potential there. we think we have a very big potential there I want to touch on the other question you have of complexity. i want to touch on the other question you have of complexity This was a contrarian bet that we made some years ago and went into podcasts where everyone said, "Clearly you're going to build a separate podcast app," and then sort of clearly you should have had a separate audiobooks app maybe. By then people had understood the strategy. Our intuition then, which I feel has been very vindicated now with the question you had, Rich, about software doing more, was that it's just software. Shouldn't the software adapt to the user instead of the user adapting by switching software? Shouldn't the skip button turn into a 15-second scrub button? Shouldn't it turn into a chapter button when you listen to books? Software is getting more malleable and now we're even entering the era of generative UI, not less malleable. This was a contrarian bet that we made some years ago and went into podcasts where everyone said, "Clearly you're going to build a separate podcast app," and then sort of clearly you should have had a separate audiobooks app maybe. this was a contrarian bet that we made some years ago and went into podcasts where everyone said "clearly you're going to build a separate podcast app," and then sort of clearly you should have had a separate audiobooks app maybe By then people had understood the strategy. by then people had understood the strategy Our intuition then, which I feel has been very vindicated now with the question you had, Rich, about software doing more, was that it's just software. our intuition then which i feel has been very vindicated now with the question you had rich about software doing more was that it's just software Shouldn't the software adapt to the user instead of the user adapting by switching software? shouldn't the software adapt to the user instead of the user adapting by switching software Shouldn't the skip button turn into a 15-second scrub button? shouldn't the skip button turn into a 15-second scrub button Shouldn't it turn into a chapter button when you listen to books? shouldn't it turn into a chapter button when you listen to books Software is getting more malleable and now we're even entering the era of generative UI, not less malleable. software is getting more malleable and now we're even entering the era of generative ui not less malleable My job of keeping the complexity down and serving many different use cases actually gets easier and easier, not harder. I think we're on the right strategy. If you think about what these others, Anthropic and so forth, they're also super apps. They're trying to serve many different use cases, right? This is the opportunity that we have as well, to just be able to serve much more. The whole point is to leverage your existing distribution. You want to bring something to 760 million users day one, not zero users in the App Store. We still think about that strategy, but we actually think it's more vindicated now and it's easier to do than before. My job of keeping the complexity down and serving many different use cases actually gets easier and easier, not harder. my job of keeping the complexity down and serving many different use cases actually gets easier and easier not harder I think we're on the right strategy. i think we're on the right strategy If you think about what these others, Anthropic and so forth, they're also super apps. if you think about what these others anthropic and so forth they're also super apps They're trying to serve many different use cases, right? they're trying to serve many different use cases right This is the opportunity that we have as well, to just be able to serve much more. this is the opportunity that we have as well to just be able to serve much more The whole point is to leverage your existing distribution. the whole point is to leverage your existing distribution You want to bring something to 760 million users day one, not zero users in the App Store. you want to bring something to 760 million users day one not zero users in the app store We still think about that strategy, but we actually think it's more vindicated now and it's easier to do than before. we still think about that strategy but we actually think it's more vindicated now and it's easier to do than before

Speaker 2: Great. All right, thanks, Justin. Thank you, Alex and Gustav. That concludes our Q&A session. Great. great All right, thanks, Justin. all right thanks justin Thank you, Alex and Gustav. thank you alex and gustav That concludes our Q&A session. that concludes our q&a session

Speaker 6: Thank you, everyone. Thank you, everyone. thank you everyone

Speaker 2: Thanks everyone. Thanks everyone. thanks everyone

Speaker 6: Thanks for coming. Thanks for coming. thanks for coming

Speaker 2: For spending your morning with us. We appreciate your interest in Spotify. Thank you. For spending your morning with us. for spending your morning with us We appreciate your interest in Spotify. we appreciate your interest in spotify Thank you. thank you