#1Spotify Q3 2023 Update October 24th, 2023 1#2Table of Contents Spotify Executive Summary Key Highlights Financial Summary MAUS & Subscribers Product & Platform Outlook Financial Statements p.03 p.04 p.06 p.13 p.16 p.21 p.24 2#3Executive Summary The business delivered strong results in Q3, as all of our KPIs exceeded guidance. Our MAU performance remained solid, with net additions of 23 million surpassing guidance by 2 million. Subscriber net additions of 6 million were also ahead by 2 million. Revenue was better and grew 17% Y/Y on a constant currency* basis, reflecting ~300 bps of sequential acceleration vs. Q2'23. Gross Margin of 26.4% was also ahead of guidance and up 166 bps Y/Y. Operating Income of €32 million was better due to the higher Gross Margin, as well as lower than expected personnel and related costs and marketing spend. Free Cash Flow* was €216 million in the quarter. Overall, we are pleased with our performance in Q3, and view the business as well positioned to drive continued progress towards delivering against our Investor Day goals. Spotify USER & FINANCIAL SUMMARY USERS (M) Total Monthly Active Users ("MAUS") Premium Subscribers Ad-Supported MAUS FINANCIALS (€M) Premium Ad-Supported Total Revenue Gross Profit Gross Margin Adjusted Gross Margin* Operating (Loss)/Income Operating Margin Adjusted Operating (Loss)/Income* Adjusted Operating Margin* Net Cash Flows From Operating Activities Free Cash Flow* Q3 2022 Q2 2023 Q3 2023 456 195 273 2,651 385 3,036 3,177 2,773 404 750 24.7% 1 (228) (7.5%) 551 220 343 40 35 766 24.1% 25.5% (247) (7.8%) (112) (3.5%) 39 13 574 26% 226 16% 361 32% 2,910 447 3,357 885 26.4% 1 32 1.0% 1 L Y/Y 211 216 10% 16% 11% 18% 1 11 11 Q/Q 4% 3% 5% 5% 11% 6% 16% * Constant Currency, Adjusted Gross Margin, Adjusted Operating Loss, Adjusted Operating Margin and Free Cash Flow are non-IFRS measures. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. 3#4Key Highlights Second largest Q3 for MAU net additions with continued Subscriber outperformance ● Spotify MAUS grew 26% Y/Y to 574 million, 2 million above guidance. Net additions of 23 million represented our second largest Q3 net addition performance in our history Premium Subscribers grew 16% Y/Y to 226 million, 2 million above guidance Accelerating constant currency* Revenue growth with return to Profitability Total Revenue grew 11% Y/Y to €3.4 billion On a constant currency* basis, Total Revenue grew 17% Y/Y vs. 14% in Q2'23 Gross Margin finished at 26.4% (up 166 bps Y/Y) Achieved Operating Income of €32 million * Constant Currency adjusted measures are non-IFRS measures. See "Use Unveiled new personalized experiences for users and tools for creators Expanded Al DJ to 50 additional markets and unveiled new user features such as Jam and daylist Unveiled Al Voice Translation for select podcasts Released Showcase, a tool to help artists promote music releases In October, incorporated over 150,000 audiobook titles into our Premium offering in the United Kingdom and Australia Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. 4#5Key Highlights: Actuals vs. Guidance Users Financials Spotify Monthly Active Users (M) Premium Subscribers (M) Total Revenue (€B) Gross Margin Operating (Loss)/Income (€M) Results Above Above Results Above Above Above Q3 2023 Actuals 574 226 Q3 2023 Actuals €3.4 26.4% €32 Guidance 572 224 Guidance €3.3 26.0% (€45) 01 5#6FINANCIAL SUMMARY 6#7Financial Summary USER, FINANCIAL & LIQUIDITY SUMMARY USERS (M) Total Monthly Active Users ("MAUS") Premium Subscribers Ad-Supported MAUS FINANCIALS (€M) Premium Ad-Supported Total Revenue Gross Profit Gross Margin Total Operating Expenses Operating (Loss)/Income Operating Margin FREE CASH FLOW & LIQUIDITY (EM, unless otherwise denoted) Net Cash Flows From Operating Activities Free Cash Flow* Cash & Cash Equivalents, Restricted Cash & Short Term Investments (€B) Spotify Q3 2022 456 195 273 2,651 385 3,036 750 24.7% 978 (228) (7.5%) 40 35 3.7 Q4 2022 489 205 295 2,717 449 3,166 801 25.3% Q1 2023 (70) (73) 3.4 515 210 317 2,713 329 3,042 766 25.2% 922 Q2 2023 59 57 3.5 551 220 343 1,032 (231) (156) (247) (7.3%) (5.1%) (7.8%) 2,773 404 3,177 766 24.1% 1,013 13 9 3.5 Q3 2023 574 26% 16% 226 361 32% 2,910 447 3,357 885 26.4% 853 32 1.0% Y/Y 211 216 3.8 10% 16% 11% 18% -- -13% 11 Y/Y FXN* 16% 24% 17% 24% -- -8% * Free Cash Flow and Constant Currency adjusted measures (FXN) are non-IFRS measures. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. -- 7#8Financial Summary Revenue Profitability Free Cash Flow & Liquidity Spotify Revenue of €3,357 million grew 11% Y/Y in Q3 (or 17% Y/Y constant currency*), reflecting: Premium Revenue growth of 10% Y/Y (or 16% Y/Y constant currency*), led by subscriber gains and the early effects of price increases; and Ad-Supported Revenue growth of 16% Y/Y (or 24% Y/Y constant currency*) Gross Margin was 26.4% in Q3, up 166 bps Y/Y reflecting: Improvement in podcast trends, Growth in Marketplace activity, Other Cost of Revenue favorability and A lapping of the prior year period's €11 million unfavorable change in historical estimates for rights holder liabilities (nearly 40 bps of impact) Operating Income of €32 million reflected the above and an Operating Expense decline of 13% Y/Y (or down 8% Y/Y constant currency*), reflecting: Lower marketing spend and Lower personnel costs and related costs Free Cash Flow* was €216 million in Q3. Our liquidity and balance sheet remained strong, with €3.8 billion in cash and cash equivalents, restricted cash and short term investments. At the end of Q3, our workforce consisted of 9,241 FTES globally. * Constant Currency adjusted measures and Free Cash Flow are non-IFRS measures. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. 8#9Revenue Premium growth led by subscribers and pricing Premium Revenue grew 10% Y/Y to €2,910 million (or 16% Y/Y constant currency*), reflecting subscriber growth of 16% Y/Y and a Premium ARPU* decline of 6% Y/Y to €4.34 (or down 1% constant currency*). Excluding the impact of FX, ARPU performance was impacted by product and market mix, which was partially offset by the price increases we began implementing late in the quarter. Re-accelerating Ad-Supported growth Ad-Supported revenue grew 16% Y/Y (or 24% Y/Y constant currency*), reflecting double-digit Y/Y growth across all regions. Music advertising revenue re-accelerated and grew nearly 20% Y/Y, driven by growth in impressions sold and stable pricing. Podcast advertising revenue growth remained in the healthy double-digit range, driven by significant Y/Y growth in sold impressions across Original and Licensed podcasts and the Spotify Audience Network, which was partially offset by softer pricing. The Spotify Audience Network saw double digit Q/Q growth in participating publishers and shows and high single digit Q/Q growth in advertisers. Spotify €12,500 €10,000 €7,500 €5,000 €2,500 €3,000 €2,000 €1,000 €0 Q4'20 Q1'21 Q221 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Premium Revenue, LTM* (EM) Premium ARPU Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q222 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23. Ad-Supported Revenue, LTM* (EM) - Ad-Supported Revenue As % Of Total Revenue * Constant Currency adjusted measures are non-IFRS measures. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. ARPU means Premium Average Revenue per User. Last Twelve Months (LTM) represents annual performance covering the preceding 12 months relative to the last day of the quarter. €6.00 €5.00 €4.00 €3.00 €2.00 25% 20% 15% 10% 5% 9#10Gross Margin Podcasting and Marketplace gains + Other Cost of Revenue favorability aid expansion Total Gross Margin Q3'19 Q3'20 Q3'21 Spotify 26.4% il Q3'22 Q3'23 Gross Margin finished at 26.4% in Q3, up 166 bps Y/Y. The Y/Y trend reflects improvement in podcast trends, growth in Marketplace, Other Cost of Revenue favorability and the lapping of the prior year period's unfavorable change in historical estimates for rights holder liabilities (nearly 40 bps of impact). Premium Gross Margin 29.1% Q3'19 Q3'20 Q3'21 Q3'22 Q3'23 Premium Gross Margin was 29.1% in Q3, up 111 bps Y/Y. The Y/Y trend reflects improvement in music profitability (aided by Marketplace growth) and Other Cost of Revenue favorability. Ad-Supported Gross Margin Q3'19 Q3'20 Q3'21 Q3'22 8.3% Q3'23 Ad-Supported Gross Margin was 8.3% in Q3, up 646 bps Y/Y. The Y/Y trend reflects improvement in podcast trends and music profitability as well as Other Cost of Revenue favorability. 10#11Operating Expenses Y/Y decline led by lower marketing and personnel costs Operating Expenses declined 13% Y/Y (or down 8% Y/Y on a constant currency* basis), driven primarily by lower marketing expenses and a decrease in personnel and related costs. Social Charge movements were modestly better than expected but not a meaningful driver of the Y/Y trend. We are encouraged by the early results we have seen from select efficiency initiatives. As a reminder, Social Charges are payroll taxes associated with employee salaries and benefits in select countries where we operate. Since a portion of these taxes is tied to the intrinsic value of share-based compensation awards, movements in our stock price can lead to fluctuations in the taxes we accrue. Spotify * Constant Currency adjusted measures are non-IFRS measures. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. €4,000 €3,000 €2,000 €1,000 €0 MI Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 - Total Operating Expenses Y/Y -18% -13% Operating Expense Trends Sales & Marketing Q3'23 Y/Y Growth -4% TH Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Total Operating Expenses, LTM (€M) 1% -19% -13% Q3'23 Y/Y Growth Constant Currency 75% 50% 25% 0% -13% -25% Research & Development General & Administrative 11#12Free Cash Flow Building and sustaining a strong balance sheet Free Cash Flow was €216 million in Q3, an increase Y/Y as a result of higher Net Income adjusted for non-cash items which was partially offset by reduced favorability in net working capital. Additionally, capital expenditures declined €4 million Y/Y to €1 million as a result of the completion of office build-outs. While the magnitude of Free Cash Flow can fluctuate from quarter to quarter based on seasonality and timing, we have averaged approximately €200 million of positive Free Cash Flow on a trailing 12 month basis for the past three years. On a cumulative basis, we have generated €1.6 billion of Free Cash Flow since the beginning of 2016, supporting our strong balance sheet and €3.8 billion in cash and cash equivalents, restricted cash and short term investments balance. Spotify €500 €400 €300 €200 €100 €0 €2,000 €1,500 €1,000 €500 €0 MMM.... Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Free Cash Flow, LTM* (EM) Avg. Free Cash Flow, LTM* (EM) Q4'20 Q1'21 Q221 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Free Cash Flow, Cume* (€M) * Last Twelve Months (LTM) represents annual performance covering the preceding 12 months relative to the last day of the quarter. Cume represents cumulative performance since the beginning of 2016. 12#13MAUS & SUBSCRIBERS 13#14Monthly Active Users (MAUS) Total MAUS grew 26% Y/Y to 574 million, up from 551 million last quarter and above our guidance by 2 million. Quarterly performance versus our guidance was impacted by: Sustained double digit Y/Y growth in all regions Outperformance in Rest of World and Latin America Continued performance marketing efficiencies ● ● Spotify 16% 22% 27% 35% Q3'19 19% Rest of World 22% 25% 34% Q3'20 21% 22% 24% 34% Q3'21 Latin America 26% 21% 22% 31% Q3'22 North America 31% 21% 19% 28% Q3'23 Europe 14#15Premium Subscribers Our Premium Subscribers grew 16% Y/Y to 226 million, up from 220 million last quarter. Quarterly performance versus our guidance was impacted by: ● Spotify Outperformance across all regions, led by North America and Latin America Strong Q3 promotional campaign intake due to top-of-funnel health Better than expected gross intake in markets that saw price increases 10% 20% 30% 40% Q3'19 10% Rest of World 21% 29% 40% Q3'20 11% 20% 29% 40% Q3'21 Latin America 12% 21% 28% 39% Q3'22 North America 13% 21% 27% 39% Q3'23 Europe 15#16PRODUCT & PLATFORM 16#17Building the World's #1 Audio Network Roku Spotify Deepened partnership with Roku to make video ads available in the Spotify app experience on Roku connected TV (CTV) devices. Spotify daylist daily. Jam Spotify Expanded AI DJ to 50 more markets and introduced new ways for users to listen with features such as Jam, a personalized way to listen with friends, and daylist, a hyper-personalized playlist that updates multiple times e YOUNG ADULT ON SPOTIFY ROMANCE ON SPOTIFY TRUE CRIME ON SPOTIFY AUDIOBOOKS ON SPOTIFY Listen to stories that speak for themselves AUDIOBOOKS ON SPOTIFY THRILLERS ON SPOTIFY MEMOIR ON SPOTIFY SCIENCE-FICTION ON SPOTIFY In October, made over 150,000 audiobooks available to eligible Premium Subscribers in the United Kingdom and Australia with up to 15 hours of audiobook access a month. 17#18Podcasting Spotify illo Lex Fridman Podcast Spotify 300- - A ARMCHAIR EXPERT Kristen Bell, by the grace of Ⓒ Anda bost DOAC The De DFA Ⓒ 2 ollo Piloted Voice Translations, powered by Al, to translate select podcasts into additional languages in the podcaster's voice. ()))) PRESENTED BY DIAGEO AND mintmobile A SPOTIFY PODCAST STRIKE FORCE FIVE FEATURING STEPHEN COLBERT JIMMY FALLON JIMMY KIMMEL SETH MEYERS JOHN OLIVER Joined forces with Stephen Colbert, Jimmy Fallon, Jimmy Kimmel, Seth Meyers and John Oliver for Strike Force Five, a new limited-run podcast. Spotify Science Vs Episodes About More like this Best place to start Science Vs The latest hot new trend is breathing, wat, tan right there a claims that a-caled breathwork con cure depression and supercharge your brain Breach... 148 inft ☺ ☺ .. About the host A SPOTIFY PODCAST SCIENCE VS Science Ve Episodes About More like this Host recommendations anything goes with emena cham.. Podcast anything go with each re amme refers to shore her thoughts with rather than a physical human being, so thank god she fes Paldies PERT Armchair Expert with Dax Shep... Podcast Armchai Expert Hi, I'm De Shepit, and love talep to people an e feinated by the messiness of being hamon, and Celebrities More like this Not Partit Released a wave of new features for podcasters to get discovered and grow their audiences including customizations, impression analytics, automated ads and more. 18#19Music Surrender Album Maggie Rogers Spotify + 110 A Released a new Sponsored Recommendation, Showcase, that lets creators promote new and catalog music releases anytime at the top of Spotify's Home. Promoting your next release with Marquee just got easier New music for you! Best Priund Best Friend Breakup Lauren Spencer Smith Go to Single Expanded Marquee self-serve buying in Spotify for Artists to all eligible artist teams in Canada. ZACH BRYAN In August, Zach Bryan released his eponymous fourth studio album and has seen nearly a 500% increase in monthly listeners since being featured as a US RADAR artist back in May 2022. ADVISORY Travis Scott released his highly anticipated UTOPIA which became Spotify's most-streamed album in a single day in 2023 with nearly 130 million global streams. 19#20FC Barcelona Spotify E Sve DADDY YANKEE 1 UNHCR (1) ACNUR Specify ATA Spotify Kicked off FC Barcelona's preseason tour and the second year of our partnership by bringing together the worlds of music and football through matches and studio tours, as well as collaborations with artists and fans. Spotify 20#21OUTLOOK 21#22Outlook for Q4'23 The following forward-looking statements reflect Spotify's expectations for Q4 2023 as of October 24, 2023 and are subject to substantial uncertainty. Total MAUS Total Premium Subscribers Total Revenue Gross Margin Operating Income Spotify 601 million 235 million €3.7 billion 26.6% €37 million Implies the addition of approximately 27 million net new MAUS in the quarter Implies the addition of approximately 9 million net new subscribers in the quarter Assumes approximately 300 bps headwind to growth Y/Y due to foreign exchange rate movements Primarily driven by Y/Y improvement in podcasting, music and Other Cost of Revenue Social Charges are based on a Q3 close share price of $154.64 22#23Webcast Information We will host a live question and answer session starting at 8:00 a.m. ET today on investors.spotify.com. Daniel Ek, our Founder and CEO, and Paul Vogel, our Chief Financial Officer, will be on hand to answer questions submitted through slido.com using the event code #Spotify EarningsQ323. Participants also may join using the listen-only conference line by registering through the following site: https://conferencingportals.com/event/VqsCtlLh We use investors.spotify.com and newsroom.spotify.com websites as well as other social media listed in the "Resources - Social Media" tab of our Investors website to disclose material company information. Use of Non-IFRS Measures To supplement our financial information presented in accordance with IFRS, we use the following non-IFRS financial measures: Revenue excluding foreign exchange effect, Premium revenue excluding foreign exchange effect, Ad-Supported revenue excluding foreign exchange effect, gross profit excluding foreign exchange effect, Operating expense excluding foreign exchange effect, Sales and marketing expense excluding foreign exchange effect, Research and development expense excluding foreign exchange effect, General and administrative expense excluding foreign exchange effect, adjusted gross margin, adjusted operating income/(loss), adjusted operating margin, and Free Cash Flow. Management believes that Revenue excluding foreign exchange effect, Premium revenue excluding foreign exchange effect, Ad-Supported revenue excluding foreign exchange effect, gross profit excluding foreign exchange effect, Operating expense excluding foreign exchange effect, Sales and marketing expense excluding foreign exchange effect, Research and development expense excluding foreign exchange effect, General and administrative expense excluding foreign exchange effect, adjusted gross margin, adjusted operating income/(loss), and adjusted operating margin are useful to investors because they present measures that facilitate comparison to our historical performance. However, these should be considered in addition to, not as a substitute for or superior to, Revenue, Premium revenue, Ad-Supported revenue, gross profit, Operating expense, Sales and marketing expense, Research and development expense, General and administrative expense, gross margin, operating income/(loss), operating margin, or other financial measures prepared in accordance with IFRS. Management believes that Free Cash Flow is useful to investors because it presents a measure that approximates the amount of cash generated that is available to repay debt obligations, to make investments, and for certain other activities that exclude certain infrequently occurring and/or non-cash items. However, Free Cash Flow should be considered in addition to, not as a substitute for or superior to, net cash flows (used in)/from operatin activities or other financial measures prepared in accordance with IFRS. For more information on these non-IFRS financial easures, please see "Reconciliation of IFRS to Non-IFRS Results" section below. Forward Looking Statements This shareholder update contains estimates and forward-looking statements. All statements other than statements of historical fact are forward-looking statements. The words "may," "might," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "seek," "believe," "estimate," "predict," "potential," "continue," "contemplate," "possible," and similar words are intended to identify estimates and forward-looking statements. Our estimates and forward-looking statements are mainly based on our current expectations and estimates of future events and trends, which affect or may affect our businesses and operations. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to numerous risks and uncertainties and are made in light of information currently available to us. Many important factors may adversely affect our results as indicated in forward-looking statements. These factors include, but are not limited to: our ability to attract prospective users, retain existing users, and monetize our products and services; competition for users, user listening time, and advertisers; risks associated with our international operations and our ability to manage our growth; risks associated with our new products or services and our emphasis on long-term user engagement over short-term results; our ability to predict, recommend, and play content that our users enjoy; our ability to be profitable or generate positive cash flow on a sustained basis; our ability to convince advertisers of the benefits of our advertising offerings; our ability to forecast or optimize advertising inventory amid emerging industry trends in digital advertising; our ability to generate revenues from podcasts, audiobooks, and other non-music content; potential disputes or liabilities associated with content made available on our premium service and ad-supported service (collectively, the "Service"); risks relating to acquisitions, investments, and strategic alliances; our dependence upon third-party licenses for most of the content we stream; our lack of control over third-party content providers who are concentrated and can unilaterally affect our access to content; our ability to comply with complex license agreements; our ability to accurately estimate royalty payments under our license agreements and relevant statutes; the limitations on our operating flexibility due to financial commitments required under certain of our license agreements; our ability to identify the compositions embodied in sound recordings and ownership thereof in order to obtain licenses or comply with existing license agreements; assertions by third parties of infringement or other violations by us of their intellectual property rights; our ability to protect our intellectual property; the dependence of streaming on operating systems, online platforms, hardware, networks, regulations, and standards that we do not control; our ability to maintain the integrity of our technology structure and systems or the security of confidential information; undetected errors, bugs or vulnerabilities in our products; interruptions, delays, or discontinuations in service arising from our systems or systems of third parties; changes in laws or regulations affecting us; risks relating to privacy and data security; our ability to maintain, protect, and enhance our brand; risks associated with increased scrutiny of environmental, social, and governance matters; payment-related risks; our dependence on key personnel and ability to attract, retain, and motivate highly skilled employees; our ability to access to additional capital to support growth; risks relating to currency exchange rate fluctuations and foreign exchange controls; the impact of economic, social, or political conditions, including the continued conflict between Russia and Ukraine, inflation, changes in interest rates, and related market uncertainty; our ability to accurately estimate user metrics and other estimates; our ability to manage and remediate attempts to manipulate streams and attempts to gain or provide unauthorized access to certain features of our Service; risks related to our indebtedness, including risks related to our Exchangeable Notes; fluctuation of our operating results and fair market value of ordinary shares; tax-related risks; the concentration of voting power among our founders, which limits shareholders' ability to influence our governance and business; and risks related to our status as a foreign private issuer and a Luxembourg company. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from our estimates and forward-looking statements is included in our filings with the U.S. Securities and Exchange Commission ("SEC"), including our Annual Report on Form 20-F filed with the SEC on February 2, 2023, as updated by subsequent reports filed with the SEC. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this shareholder update. Rounding Certain monetary amounts, percentages, and other figures included in this update have been subject to rounding adjustments. The sum of individual metrics may not always equal total amounts indicated due to rounding. Spotify 23#24FINANCIAL STATEMENTS 24#25Trending Charts MAUS, Ad-Supported Users, Premium Subscribers & Revenue By Segment 600 550 500 450 400 350 300 250 Q4'20 Spotify Q1'21 Q2'21 Q3'21 Monthly Active Users (M) 600 500 400 300 200 100 0 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Ad-Supported Users (M) Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Premium Subscribers (M) Q3'23 * Last Twelve Months (LTM) represents annual performance covering the preceding 12 months relative to the last day of the quarter. €12,500 €10,000 €7,500 €5,000 €2,500 €0 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Ad-Supported Revenue, LTM* (EM) Q2'22 Q3'22 Q4'22 Q1'23 Premium Revenue, LTM" (EM) 25#26Trending Charts Gross Profit By Segment, Gross Margin By Segment & Free Cash Flow €4,000 €3,000 €2,000 €1,000 €0 Ad-Supported Gross Profit, LTM* (EM) Spotify Premium Gross Profit, LTM* (EM) 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% I Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Ad-Supported Gross Margin, LTM* Q4'22 Premium Gross Margin, LTM^ Q1'23 Q2'23 Q3'23 Total Gross Margin, LTM* * Last Twelve Months (LTM) represents annual performance covering the preceding 12 months relative to the last day of the quarter. €300 €200 €100 €0 Q4'20 Q1'21 Q2'21 ■ Q3'21 Q4'21 Free Cash Flow, LTM* (EM) 26#27Interim condensed consolidated statement of operations (Unaudited) (in € millions, except share and per share data) Revenue Cost of revenue Gross profit Research and development Sales and marketing General and administrative Operating income/(loss) Finance income Finance costs Finance income/(costs) - net Income/(loss) before tax Income tax expense Net income/(loss) attributable to owners of the parent Earnings/(loss) per share attributable to owners of the parent Basic Diluted Weighted-average ordinary shares outstanding Basic Diluted September 30, 2023 3,357 2,472 885 369 355 129 853 32 55 (14) 41 73 8 65 0.33 0.33 194,881,723 198,012,369 Three months ended June 30, 2023 3,177 2,411 766 453 399 161 1,013 (247) 33 (27) 6 (241) 61 (302) (1.55) (1.55) 194,420,128 194,420,128 September 30, 2022 3,036 2,286 750 386 432 160 978 (228) 102 (18) 84 (144) 22 (166) (0.86) (0.99) 193,077,334 195,988,834 27#28Interim condensed consolidated statement of financial position (Unaudited) (in € millions) Assets Non-current assets Lease right-of-use assets Property and equipment Goodwill Intangible assets Long term investments Restricted cash and other non-current assets Deferred tax assets Current assets Trade and other receivables Income tax receivable Short term investments Cash and cash equivalents Other current assets Total assets Equity and liabilities Equity Share capital Other paid in capital Treasury shares Other reserves Accumulated deficit Equity attributable to owners of the parent Non-current liabilities Exchangeable Notes Lease liabilities Accrued expenses and other liabilities Provisions Deferred tax liabilities Current liabilities Trade and other payables Income tax payable Deferred revenue Accrued expenses and other liabilities Provisions Derivative liabilities Total liabilities Total equity and liabilities September 30, 2023 343 275 1,180 98 903 75 23 2,897 747 8 1,097 2,618 225 4,695 7,592 4,931 (262) 1,582 (4,112) 2,139 1,209 520 14 3 6 1,752 945 8 599 2,108 24 17 3,701 5,453 7,592 December 31, 2022 417 348 1,168 127 1,138 78 8 3,284 690 5 867 2,483 307 4,352 7,636 4,789 (262) 1,521 (3,647) 2,401 1,128 555 28 3 5 1,719 845 11 520 2,093 26 21 3,516 5,235 7,636 28#29Interim condensed consolidated statement of cash flows (Unaudited) (in € millions) Operating activities Net income/(loss) Adjustments to reconcile net income/(loss) to net cash flows Depreciation of property and equipment and lease right-of-use assets Amortization of intangible assets Impairment charges on real estate assets Write-off of content assets Excess and obsolete reserve Share-based compensation expense Finance income Finance costs Income tax expense Other Changes in working capital: Increase in trade receivables and other assets Increase in trade and other liabilities Increase in deferred revenue Decrease in provisions Interest paid on lease liabilities Interest received Income tax paid Net cash flows from operating activities Investing activities Business combinations, net of cash acquired Purchases of property and equipment Purchases of short term investments Sales and maturities of short term investments Change in restricted cash Other Net cash flows (used in)/from investing activities Financing activities Payments of lease liabilities Proceeds from exercise of stock options Payments for employee taxes withheld from restricted stock unit releases Net cash flows (used in)/from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the period Net foreign exchange gains/(losses) on cash and cash equivalents Cash and cash equivalents at period end* September 30, 2023 *As of September 30, 2023, for the urpo of presentation in the interim condensed consolidated statement of cash flows, cash and cash equivalents are presented net of bank overdrafts of €3 million. 65 26 10 85 (55) 14 8 (1) (69) 62 56 (2) (9) 28 (7) 211 (1) (406) 201 6 (3) (203) (13) 32 (20) (1) 7 2,550 58 2,615 Three months ended June 30, 2023 (302) 30 14 90 30 97 (33) 27 61 2 (97) 77 18 (2) (10) 26 (15) 13 (2) (138) 265 (2) (10) 113 (27) 35 (16) (8) 118 2,443 (11) 2,550 September 30, 2022 (166) 30 14 (2) 108 (102) 18 22 5 (6) 117 20 (12) (14) 12 (4) 40 (107) (5) (78) 78 3 (109) (11) (10) (21) (90) 2,786 155 2,851 29#30Calculation of basic and diluted earnings/(loss) per share (Unaudited) (in € millions, except share and per share data) Basic earnings/(loss) per share Net income/(loss) attributable to owners of the parent Shares used in computation: Weighted-average ordinary shares outstanding Basic earnings/(loss) per share attributable to owners of the parent Diluted earnings/(loss) per share Net income/(loss) attributable to owners of the parent Fair value gains on dilutive Exchangeable Notes Net income/(loss) used in the computation of diluted earnings/(loss) per share Shares used in computation: Weighted-average ordinary shares outstanding Exchangeable Notes Stock options Restricted stock units Other contingently issuable shares Diluted weighted-average ordinary shares Diluted earnings/(loss) per share attributable to owners of the parent September 30, 2023 65 194,881,723 0.33 65 65 194,881,723 1,191,994 1,917,347 21,305 198,012,369 0.33 Three months ended June 30, 2023 (302) 194,420,128 (1.55) (302) (302) 194,420,128 194,420,128 (1.55) September 30, 2022 (166) 193,077,334 (0.86) (166) (28) (194) 193,077,334 2,911,500 195,988,834 (0.99) 30#31Reconciliation of IFRS to non-IFRS results Revenue on a constant currency basis (Unaudited) (in € millions, except percentages) IFRS revenue Foreign exchange effect on 2023 revenue using 2022 rates Revenue excluding foreign exchange effect IFRS revenue year-over-year change % Revenue excluding foreign exchange effect year-over-year change % IFRS Premium revenue Foreign exchange effect on 2023 Premium revenue using 2022 rates Premium revenue excluding foreign exchange effect IFRS Premium revenue year-over-year change % Premium revenue excluding foreign exchange effect year-over-year change % IFRS Ad-Supported revenue Foreign exchange effect on 2023 Ad-Supported revenue using 2022 rates Ad-Supported revenue excluding foreign exchange effect IFRS Ad-Supported revenue year-over-year change % Ad-Supported revenue excluding foreign exchange effect year-over-year change % Three months ended September 30, 2023 September 30, 2022 3,357 3,036 (188) 3,545 11% 17% 2,910 (156) 3,066 10% 16% 447 (32) 479 16% 24% 2,651 385 31#32Reconciliation of IFRS to non-IFRS results Operating expenses on a constant currency basis (Unaudited) (in € millions, except percentages) IFRS Operating expenses Foreign exchange effect on 2023 operating expenses using 2022 rates Operating expenses excluding foreign exchange effect IFRS Operating expenses year over year change % Operating expenses excluding foreign exchange effect year-over-year change % IFRS Research and development expenses Foreign exchange effect on 2023 expenses using 2022 rates Research and development expenses excluding foreign exchange effect IFRS Research and development expenses year over year change % Research and development expenses excluding foreign exchange effect year-over-year change % IFRS Sales and marketing expenses Foreign exchange effect on 2023 expenses using 2022 rates Sales and marketing expenses excluding foreign exchange effect IFRS Sales and marketing expenses year over year change % Sales and marketing expenses excluding foreign exchange effect year-over-year change % IFRS General and administrative expenses Foreign exchange effect on 2023 expenses using 2022 rates General and administrative expenses excluding foreign exchange effect IFRS General and administrative expenses year over year change % General and administrative expenses excluding foreign exchange effect year-over-year change % Three months ended September 30, 2023 September 30, 2022 978 853 (49) 902 (13)% (8)% Three months ended September 30, 2023 September 30, 2022 369 386 (19) 388 (4)% 1% Three months ended September 30, 2023 September 30, 2022 355 432 (19) 374 (18)% (13)% Three months ended September 30, 2023 September 30, 2022 129 160 (11) 140 (19)% (13)% 32#33Reconciliation of IFRS to non-IFRS results Free Cash Flow (Unaudited) (in € millions) Net cash flows from/(used in) operating activities Capital expenditures Change in restricted cash Free Cash Flow Free Cash Flow (Unaudited) (in € millions) March 31, 2020 Net cash flows from operating activities Capital expenditures Change in restricted cash Free Cash Flow Free Cash Flow (Unaudited) (in € millions) Net cash flows from operating activities Capital expenditures Change in restricted cash Free Cash Flow (9) (12) (21) June 30, 2020 39 (14) 2 27 September December March 31, 30, 2020 31, 2020 2021 December 31, 2020 122 (17) (2) 103 259 (78) 2 183 March 31, 2021 73 107 (35) 2 333 December 31, 2016 101 (27) (1) 74 (90) 2 245 65 (24) June 30, 2021 41 348 (96) 252 June 30, 2021 54 (20) December 31, 2017 179 (36) (34) 109 34 September 30, 2021 349 (104) 3 248 Three months ended September December March 31, 31, 2021 30, 2021 2022 123 (25) 1 99 December 31, 2021 361 (85) 1 277 December 31, 2018 344 (125) (10) 209 119 (16) 103 333 Last twelve months ended March 31, June 30, 2022 2022 (71) (4) 37 (10) (5) 258 22 June 30, 2022 318 (56) (1) 261 Twelve months ended December 31, 2019 573 (135) 2 440 39 (5) 3 37 September 30, 2022 September 30, 2022 235 (36) (2) 197 40 (5) 35 December 31, 2022 December 31, 2020 December 31, 2022 259 (78) 2 183 46 (25) 21 (70) (5) 2 (73) March 31, 2023 March 31, 2023 59 57 68 (17) 5 56 December 31, 2021 361 (85) 1 277 June 30, 2023 June 30, 2023 13 (2) (2) 9 42 (14) 28 September 30, 2023 211 (1) 6 216 September 30, 2023 213 (10) 6 209 December 31, 2022 46 (25) 21 33#34Spotify