#1Spotify Q2 2023 Update July 25th, 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.20 p.23 2#3Executive Summary The business performed very well in Q2, led by exceptionally strong MAU and Subscriber results. MAU net additions of 36 million were 21 million above guidance an all-time high for the company-while Subscriber net additions of 10 million were 3 million ahead of guidance and the highest Q2 in company history. Revenue was in-line with guidance. Reported Gross Margin and Operating Loss were both primarily impacted by charges related to our actions to streamline operations and reduce costs. Excluding these items, Adjusted Gross Margin* of 25.5% was in-line and up 22 bps Y/Y (consistent with how we guided the quarter). Adjusted Operating Loss* of (€112) million was better than guidance, aided by lower marketing spend. Free Cash Flow* was €9 million in the quarter. Overall, we are encouraged by the strength we saw in Q2 and our momentum heading into the back half of 2023. 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* Q2 2022 Q1 2023 433 188 256 2,504 360 2,864 704 24.6% 25.3% 515 210 317 39 37 766 25.2% -- (194) (156) (6.8%) (5.1%) 2,713 2,773 11% 404 12% 329 3,042 3,177 11% (174) (112) (6.1%) (3.7%) Q2 2023 59 57 551 27% 220 343 17% 34% 766 9% 24.1% 25.5% Y/Y (247) (7.8%) (112) (3.5%) 13 9 -- 11 Q/Q 7% 5% 8% 2% 23% 4% 0% * 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 All time high MAU growth and strongest Q2 to date for Subscriber net additions ● Spotify MAUS grew 27% Y/Y to 551 million, 21 million above guidance. Net additions of 36 million represented our largest quarterly net addition performance in our history All regions outperformed and saw higher MAU net additions relative to the prior year period, aided by improved retention and marketing efficiencies Premium Subscribers grew 17% Y/Y to 220 million, 3 million above guidance Accelerating constant currency* Revenue growth and Adjusted Gross Margin* expansion Total Revenue grew 11% Y/Y to €3.2 billion On a constant currency* basis, Total Revenue grew 14% Y/Y vs. 13% in Q1'23 Adjusted Gross Margin* finished at 25.5% (up 22 bps Y/Y) excluding one-time charges related to efficiency measures Unveiled new personalized experiences for users and tools for advertisers Expanded Al DJ to Premium users in the United Kingdom and Ireland Rolled out a redesigned desktop experience and added an additional 11 new languages for users around the world Announced a new Original podcast with Trevor Noah coming to Spotify later this year Launched Spotify Ad Analytics, a free tool designed to provide advertisers with audio advertising measurement services * Constant Currency adjusted measures and Adjusted Gross Margin are non-IFRS measures. See "Use of 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 Adjusted Gross Margin* Operating (Loss)/Income (€M) Adjusted Operating (Loss)/ Income* Results Above Above Results In-line In-line Above Q2 2023 Actuals 551 220 Q2 2023 Actuals €3.2 24.1% 25.5% (€ 247) (€ 112) Guidance 530 217 Guidance €3.2 25.5% 25.5% (€ 129) (€ 129) * Adjusted Gross Margin and Adjusted Operating Loss are non-IFRS measures. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. 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 Q2 2022 Q3 2022 433 188 256 2,504 360 2,864 704 24.6% 898 (194) (6.8%) 39 37 3.6 456 195 273 2,651 385 3,036 750 24.7% 978 Q4 2022 40 35 3.7 489 205 295 2,717 449 3,166 801 25.3% 1,032 (228) (231) (7.5%) (7.3%) (70) (73) 3.4 Q1 2023 515 210 317 2,713 329 3,042 766 25.2% 922 (156) (5.1%) 59 57 3.5 Q2 2023 551 220 343 2,773 404 3,177 24.1% 1,013 766 9% (247) (7.8%) Y/Y 13 9 3.5 27% 17% 34% 11% 12% 11% -- 13% Y/Y FXN* 14% 15% 14% 12% - 16% * 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 €3,177 million grew 11% Y/Y in Q2 (or 14% Y/Y constant currency*), reflecting: Premium Revenue growth of 11% Y/Y (or 14% Y/Y constant currency*), led by subscriber gains; and Ad-Supported Revenue growth of 12% Y/Y (or 15% Y/Y constant currency*) Gross Margin was 24.1% in Q2, down 47 bps Y/Y due to €44 million in net charges primarily related to the shut down of various podcast shows and the impairment of excess real estate. Excluding these charges, Adjusted Gross Margin* was 25.5% and up 22 bps Y/Y, reflecting: Improvement in podcast profitability, growth in Marketplace activity and Other Cost of Revenue favorability; partially offset by Higher music royalty costs Operating Loss of (€247) million in Q2 was impacted by €135 million in net charges. These charges include the aforementioned impact to Gross Margin and an additional €91 million related primarily to our real estate optimization plan and severance. Excluding these charges, Adjusted Operating Loss* was (€112) million and reflected: Higher Social Charges Y/Y; and Higher personnel costs, partially offset by lower marketing and legal costs Free Cash Flow* was €9 million in Q2. Our liquidity and balance sheet remained strong, with €3.5 billion in cash and cash equivalents, restricted cash and short term investments. At the end of Q2, our workforce consisted of 9,473 FTES globally. * Constant Currency adjusted measures, Adjusted Gross Margin, Adjusted Operating Loss 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 Consistent Premium growth, led by subscribers Premium Revenue grew 11% Y/Y to €2,773 million (or 14% Y/Y constant currency*), reflecting subscriber growth of 17% Y/Y and a Premium ARPU* decline of 6% Y/Y to €4.27 (or down 3% constant currency*). Excluding the impa of FX, ARPU performance was impacted by product and market mix. Broad based Ad-Supported growth Ad-Supported revenue grew 12% Y/Y (or 15% Y/Y constant currency*), reflecting double-digit Y/Y growth across nearly all regions. Music advertising revenue grew mid single-digits Y/Y, reflecting double-digit Y/Y growth in impressions sold, partially offset by softer pricing due to the macroeconomic environment. Podcast advertising revenue growth re-accelerated to more than 30% Y/Y with sold impressions across Original and Licensed podcasts and the Spotify Audience Network hitting an all-time-high, partially offset by softer pricing. The Spotify Audience Network saw double digit Q/Q growth in participating advertisers and publishers and high single digit Q/Q growth in participating shows. Spotify €12,500 €10,000 €7,500 €5,000 €2,500 €3,000 €2,000 €1,000 €0 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Premium Revenue, LTM* (€M) Premium ARPU i Q3'20 Q4'20 Q1'21 Q221 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23. 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 improvement and Other Cost of Revenue favorability aid expansion Total Gross Margin 25.5%* Q2'19 Q2'20 Q2'21 Q2'22 Q2'23 Car Thing charge, net Adjustments and net charges from efficiency activities Spotify Gross Margin finished at 24.1% in Q2. Adjusted Gross Margin* was 25.5%, which excludes €44 million in net charges. Adjusted Gross Margin* was up 22 bps Y/Y, reflecting podcasting improvement, Marketplace growth and Other Cost of Revenue favorability. Premium Gross Margin 28.4%* Q2'19 Q2'20 Q2¹21 Q2'22 Car Thing charge, net Adjustments and net charges from efficiency activities Q2'23 Premium Gross Margin was 28.5% in Q2. Adjusted Premium Gross Margin* was 28.4%, down 37 bps Y/Y, reflecting Marketplace growth and Other Cost of Revenue favorability, partially offset by increased music royalty costs. Ad-Supported Gross Margin 5.7%* Q2'19 Q2'20 Q2¹21 Q2'22 Q2'23 Adjustments and net charges from efficiency activities *Adjusted Gross Margin is a non-IFRS measure. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. Ad-Supported Gross Margin was (5.7%)% in Q2. Adjusted Ad-Supported Gross Margin was 5.7%, up 458 bps Y/Y, reflecting improving podcast profitability and Other Cost of Revenue favorability, partially offset by increased music royalty costs. 10#11Operating Expenses Primarily driven by efficiency related charges Operating Expenses grew 13% Y/Y (or 16% constant currency*), driven predominantly by charges related to efficiency efforts of €91 million (contributing ~1,000 bps to Y/Y Operating Expense growth), of which roughly €83 million were related to real-estate impairments and the remaining €8 million were severance-related and other charges. Additionally, Y/Y changes in Social Charge movements of €35 million impacted Y/Y expense growth by 400 bps. All remaining Operating Expense growth reflected higher personnel costs related to Y/Y headcount growth and acquisitions, partially offset by lower marketing and legal costs in the quarter. 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. This resulted in Social Charges related to share-based compensation of €25 million in the current period vs. (€10) million in the prior year period. 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 20% 15% 10% 5% €0 0% Operating Expense Trends INMI Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 - Total Operating Expenses Y/Y Total Operating Expenses, LTM (EM) 13% Items Affecting Operating Expense Growth Y/Y In Q2¹23 Total Operating Expenses Y/Y 3% FX Movements TH -4% Social Charges -10% Efficiency Charges 2% All Other Expenses 80% 60% 40% 20% 13% 0% 11#12Free Cash Flow Building and sustaining a strong balance sheet Free Cash Flow was €9 million in Q2, a decrease Y/Y as a result of reduced favorability in net working capital specifically related to the timing of certain payments in Q2. Additionally, capital expenditures declined €3 million Y/Y to €2 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 €1.4 billion of Free Cash Flow since the beginning of 2016, supporting our strong balance sheet and €3.5 billion in cash and cash equivalents, restricted cash and short term investments balance. Spotify €500 €400 €300 €200 €100 €0 €1,500 €1,000 €500 €0 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1 22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Free Cash Flow, LTM* (EM) Avg. Free Cash Flow, LTM* (€M) Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 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 27% Y/Y to 551 million, up from 515 million last quarter and above our guidance by 21 million. Quarterly performance versus our guidance was impacted by: ● ● Spotify Record high net additions with outperformance across all regions led by Rest of World and Latin America Continued improvements in Ad-Supported retention and performance marketing efficiencies Strong growth amongst Gen Z listeners Shifts in competitor dynamics in select developing markets 15% 21% 28% 36% Q2'19 18% Rest of World 22% 26% 34% Q2'20 20% 22% 24% 34% Q2'21 Latin America 24% 22% 22% 32% Q2'22 North America 30% 21% 20% 29% Q2'23 Europe 14#15Premium Subscribers Our Premium Subscribers grew 17% Y/Y to 220 million, up from 210 million last quarter. Quarterly performance versus our guidance was impacted by: Spotify Largest Q2 Subscriber net additions in company history across nearly all regions Q2 promotional campaign contributing to subscriber upside Outperformance across all regions, led by Europe and Latin America 10% 20% 30% 40% Q2'19 11% Rest of World 21% 29% 39% Q2'20 11% 20% 29% 40% Q2¹21 Latin America 12% 21% 29% 39% Q2'22 North America 12% 21% 28% 39% Q2'23 Europe 15#16PRODUCT & PLATFORM 16#17Building the World's #1 Audio Network Meet your DJ Spotify Good morning Rolled out AI DJ to Premium users in the United Kingdom and Ireland, the most commonly requested feature by users on social media. Spotify Redesigned our Desktop experience with a new look for the Your Library and Now Playing views to provide a richer experience, more context, and quicker access to personal favorites. عربی مصری 繁體中文(香港) Македонски Español (México) Español (Argentina) Now also available in Spotify عربي سعودي عربي مغربي Euskara Bosanski Galego English (United Kingdom) Continued to personalize the user experience with 11 new languages and dialects across mobile, bringing the total number of languages on Spotify to 74. Frequency Reach Conversions Launched Spotify Ad Analytics, a free global measurement and reporting service for brands and agencies. 17#18Podcasting Spotify Announced a new Spotify Original launching later this year with comedian and former The Daily Show host, Trevor Noah. Spotify 100k Video podcasts on Spotify Deepened engagement with users around the world with more than 100,000 video podcasts now available on Spotify (up from 70,000 in March 2023). Spotify. Advertising Broadcast-to-Podcast: auto-detects existing ads and music Cree music rule Action Uwe Breeding Cado Unveiled to Megaphone publishers broadcast-to-podcast technology that allows broadcast publishers to increase reach and monetization using our Whooshkaa acquisition. 18#19Music GENESIS Peso Pluma's GENESIS became the most streamed Musica Mexicana album in a week ever after its release on June 23rd. Spotify 10 Fuego F Mixtapes For the first time ever, we allowed fans to take over and curate the editorial Latin Gen-Z driven playlist: Fuego, by submitting their curation through a unique microsite experience. EURO ision SONG CONTEST Eurovision 2023 Loreen won big at Eurovision and on Spotify: By the competition finale, "Tattoo" reached 60+ million Spotify streams globally. 19#20OUTLOOK 20#21Outlook for Q3'23 The following forward-looking statements reflect Spotify's expectations for Q3 2023 as of July 25, 2023 and are subject to substantial uncertainty. Total MAUS Total Premium Subscribers Total Revenue Gross Margin Operating (Loss)/Income Spotify 572 million 224 million €3.3 billion 26.0% €(45) million Implies the addition of approximately 21 million net new MAUS in the quarter Implies the addition of approximately 4 million net new subscribers in the quarter Assumes approximately 600 bps headwind to growth Y/Y due to foreign exchange rate movements; announced price increases are expected to have a minimal impact on Total Revenue in Q3 Primarily driven by Y/Y improvement in podcasting and Other Cost of Revenue Assumes approximately 600 bps benefit to Operating Expense growth Y/Y due to foreign exchange movements 21#22Webcast 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 EarningsQ223. Participants also may join using the listen-only conference line by registering through the following site: https://conferencingportals.com/event/txExvogt 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, Operating expense excluding foreign exchange effect, adjusted gross profit, adjusted gross margin, Premium adjusted gross margin, Ad-Supported 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, Operating expense excluding foreign exchange effect, gross profit excluding foreign exchange impact, adjusted gross margin, Premium adjusted gross margin, Ad-Supported 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, Operating expense, gross profit, gross margin, Premium gross margin, ad-supported gross margin, operating loss, and 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 operating activities or other financial measures prepared in accordance with IFRS. For more information on these non-IFRS financial measures, 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 continuing effects of the COVID-19 pandemic, rising inflation and interest rates, financial market volatility resulting from recent bank failures, the continued conflict between Russia and Ukraine, and supply chain disruptions; 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 22#23FINANCIAL STATEMENTS 23#24Trending Charts MAUS, Ad-Supported Users, Premium Subscribers & Revenue By Segment 550 500 450 400 350 300 250 Q3'20 Spotify Q4'20 Q1'21 Q2'21 U Q3'21 Monthly Active Users (M) 600 500 400 300 200 100 0 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Ad-Supported Users (M) Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Premium Subscribers (M) Q2'23 * 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 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Ad-Supported Revenue, LTM* (EM) Q1'22 Q2'22 Premium Revenue, LTM" (EM) 24#25Trending 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 Q3'20 Q4'20 Q1'21 Q2¹21 LZ.SO Q4'21 Q1'22 Q2'22 Ad-Supported Gross Margin, LTM* Q3'22 Premium Gross Margin, LTM^ Q4'22 Q1'23 Q2'23 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 ■ Q3'21 Free Cash Flow, LTM* (EM) Q4'22 Q1'23 Q2'23 25#26Interim 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 loss Finance income Finance costs Finance income/(costs) - net Loss before tax Income tax expense Net loss attributable to owners of the parent Loss per share attributable to owners of the parent Basic Diluted Weighted-average ordinary shares outstanding Basic Diluted 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 Three months ended March 31, 2023 3,042 2,276 766 435 347 140 922 (156) 27 (77) (50) (206) 19 (225) (1.16) (1.16) 193,562,462 193,562,462 June 30, 2022 2,864 2,160 704 336 391 171 898 (194) 118 (14) 104 (90) 35 (125) (0.65) (0.85) 192,948,032 195,859,532 26#27Interim 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 June 30, 2023 344 280 1,148 105 1,015 76 15 2,983 632 8 866 2,550 273 4,329 7,312 4,899 (262) 1,594 (4,177) 2,054 1,167 522 14 3 6 1,712 893 11 536 2,053 25 28 3,546 5,258 7,312 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 27#28Interim condensed consolidated statement of cash flows (Unaudited) (in € millions) Operating activities Net loss Adjustments to reconcile net 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)/decrease in trade receivables and other assets Increase/(decrease) in trade and other liabilities Increase in deferred revenue (Decrease)/increase 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 Payment of deferred consideration pertaining to business combination 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 from/(used in) investing activities Financing activities Payments of lease liabilities Lease incentives received 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 (losses)/gains on cash and cash equivalents Cash and cash equivalents at period end 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 Three months ended March 31, 2023 (225) 31 13 105 (27) 77 19 (5) 118 (57) 6 1 (10) 23 (10) 59 (7) (2) (237) 111 13 (122) (15) 2 75 (13) 49 (14) 2,483 (26) 2,443 June 30, 2022 (125) 29 11 16 105 (118) 14 35 (5) (68) 138 10 14 (13) 4 (8) 39 (109) (5) (5) (78) 141 3 (4) (57) (10) (10) (20) (38) 2,721 103 2,786 28#29Calculation of basic and diluted loss per share (Unaudited) (in € millions, except share and per share data) Basic loss per share Net loss attributable to owners of the parent Shares used in computation: Weighted-average ordinary shares outstanding Basic loss per share attributable to owners of the parent Diluted loss per share Net loss attributable to owners of the parent Fair value gains on dilutive Exchangeable Notes Net loss used in the computation of diluted loss per share Shares used in computation: Weighted-average ordinary shares outstanding Exchangeable Notes Diluted weighted-average ordinary shares Diluted loss per share attributable to owners of the parent June 30, 2023 (302) 194,420,128 (1.55) (302) (302) 194,420,128 194,420,128.00 (1.55) Three months ended March 31, 2023 (225) 193,562,462 (1.16) (225) (225) 193,562,462 193,562,462.00 (1.16) June 30, 2022 (125) 192,948,032 (0.65) (125) (41) (166) 192,948,032 2,911,500 195,859,532.00 (0.85) 29#30Reconciliation 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 % 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 % Three months ended June 30, 2022 June 30, 2023 3,177 (94) 3,271 11% 14% 2,773 (84) 2,857 11% 14% 404 (10) 414 12% 15% Three months ended June 30, 2023 1,013 (27) 1,040 13 % 16% 2,864 2,504 June 30, 2022 360 898 30#31Reconciliation 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) December 31, 2019 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 203 (32) (2) 169 March 31, June 30, 2020 2020 (9) (12) I (21) September 30, 2020 355 (75) (2) 278 39 (14) 2 27 September December 30, 2020 31, 2020 December 31, 2020 259 73 183 December 31, 2016 101 (27) (1) 122 (17) (78) 2 103 107 (35) 2 74 March 31, 2021 333 (90) 2 245 March 31, 2021 65 (24) December 31, 2017 179 (36) (34) 109 41 June 30, 2021 348 (96) 252 Three months ended September December 30, 2021 31, 2021 June 30, 2021 54 (20) 34 September 30, 2021 349 (104) 3 248 December 31, 2018 344 (125) (10) 123 (25) 1 99 209 361 119 Last twelve months ended December March 31, 31, 2021 2022 (85) 1 277 (16) 103 March 31, 2022 333 (71) (4) 258 Twelve months ended December 31, 2019 573 (135) 2 440 37 (10) (5) 22 June 30, 2022 June 30, 2022 318 (56) (1) 261 39 (5) 3 37 September 30, 2022 September 30, 2022 December 31, 2020 259 (78) 2 183 235 (36) (2) 197 40 35 December 31, 2022 December 31, 2022 (70) (5) 2 (73) 46 (25) 21 March 31, 2023 March 31, 2023 December 31, 2021 361 (85) 1 277 59 57 68 (17) 5 56 June 30, 2023 13 June 30, 2023 (2) (2) 9 42 (14) 28 December 31, 2022 46 (25) 21 31#32Reconciliation of IFRS to non-IFRS results Adjusted gross profit (Unaudited) (in € millions, except percentages) IFRS revenue IFRS cost of revenue IFRS gross profit IFRS gross margin Adjustments: Less: changes in prior period estimates for rights holder liabilities Add: Car Thing charge Add: Employee severance and related charges Add: Impairmment charge on real estate assets Add: Write-off of content assets and contract termination and other costs Total adjustments Adjusted gross profit (non-IFRS) Adjusted gross margin (non-IFRS) Adjusted operating loss (Unaudited) (in € millions, except percentages) June 30, 2023 3,177 2,411 766 24.1% 6 (4) 7 810 25.5% Three months ended March 31, 2023 Consolidated 39 (3) 44 IFRS operating loss Adjustments: Less: changes in prior period estimates for rights holder liabilities Add: Car Thing charge Add: Employee severance and related charges Add: Impairmment charge on real estate assets Add: Write-off of assets and contract termination and other costs Total adjustments Adjusted operating loss (non-IFRS) IFRS operating margin Adjusted operating margin (non-IFRS) (2) 3,042 2,276 766 25.2 % 3 (5) 3 769 25.3% June 30, 2022 2,864 2,160 704 24.6% (11) 31 (1) 20 724 25.3 % June 30, 2023 2,773 1,984 789 28.5 % (3) (1) Reflects the charge recorded from discontinuing the production of CarThing (2) Reflects non cash asset impairment charges related to real estate optimization plan (3) Reflects content asset write offs and contract termination and related costs in connection with rationalizing our podcast content portfolio (4) Reflects severance charges incurred primarily in connection with streamlining our podcast operations (5) Reflects severance charges incurred in connection with our workforce reduction plan 1 (2) 787 28.4 % Three months ended March 31, 2023 Premium (2) 2,713 1,937 776 28.6 % |||| 1 1 777 28.6 % (5) June 30, 2022 2,504 1,804 700 28.0% (11) 31 (1) 20 720 28.8 % June 30, 2023 June 30, 2023 (247) (8) 404 427 -23 (5.7)% 135 51 (112) (7.8)% (3.5)% 23 5.7 % 12 (4) 90 (2) 41 (3) Three months ended March 31, 2023 Ad-Supported 6 (4) 6 (2) 39 (3) 46 329 339 -10 (3.0)% N|N|| Three months ended March 31, 2023 (156) (8) (2.4)% 44 2 (5) 44 (5) (112) (5.1)% (3.7)% June 30, 2022 360 356 4 1.1 % 4 1.1 % June 30, 2022 (194) (11) ३ ल । । ।।8 31 (1) 20 (174) (6.8)% (6.1)% 32#33APPENDIX 33#34Total Gross Margin Adjustments All charges related to efficiency related activities were not included in guidance Spotify 24.1% Reported Q2'23 Gross Margin -0.3% 0.2% Changes in Employee Rights Holder Severance Estimates 0.2% Real Estate Asset Impairment 1.2% Write-off of Content Assets & Contract Termination 25.5% Adj. Q2'23 Gross Margin *Adjusted Gross Margin is a non-IFRS measure. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. 34#35Social Charges Sensitivity Meaningful movements in our stock price can lead to Social Charge variance Our guidance incorporates the impact of Social Charges, the vast majority of which appear in Operating Expenses. The amount of Social Charges we accrue for and ultimately pay can be volatile, as they are tied to the value of our share price. Since we do not forecast stock price changes in our guidance, meaningful movements in our stock price over the course of a quarter can lead to meaningful changes Social Charges. As an example, at the Q2 close, our stock price was $160.55. In Q3, a 10% increase or decrease in our stock price compared to the quarter-end price would have an approximate +/- €18M impact on Social Charges. Spotify 35#36Spotify