#1Spotify Q3 2022 Update October 25th, 2022 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 majority of our key metrics surpassed guidance in Q3'22, led by MAU and Subscriber outperformance and healthy Revenue growth. Similar to last quarter, MAU growth saw notable acceleration, with net additions reaching a record Q3 high of 23 million, while Subscribers came in 1 million ahead of guidance. Gross Margin came in below expectations, mainly due to an unfavorable adjustment to prior period estimates for rights holder liabilities. We also saw a margin impact due to slower than forecast advertising growth given the challenging macro environment. Free Cash Flow was a positive €35 million in the quarter. Despite ongoing economic uncertainty, we are generally pleased with our overall results. We remain focused on delivering against the objectives we shared at our 2022 Investor Day while maintaining a strong balance sheet profile. 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 Operating (Loss)/Income Operating Margin Net Cash Flows From Operating Activities Free Cash Flow¹ Q3 2021 381 172 220 2,178 323 2,501 668 26.7% 75 3.0% 123 99 1 Free Cash Flow is a non-IFRS measure. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. Q2 2022 433 188 256 2,504 360 2,864 704 24.6% (194) (6.8%) 39 37 Q3 2022 456 195 273 2,651 385 3,036 750 24.7% (228) (7.5%) 40 35 Y/Y 20% 13% 24% 22% 19% 21% 12% -- -- 11 Q/Q 5% 4% 7% 6% 7% 6% 7% 3#4Key Highlights Broad based outperformance on MAUS and Subscribers MAUS grew 20% Y/Y to 456 million, 6 million above guidance. Net additions of 23 million represented our largest ever Q3 growth MAU strength across all regions led by Rest of World and Latin America as a result of successful marketing campaigns and OEM strength Premium Subscribers grew 13% Y/Y to 195 million, above our guidance, aided by promotional intake and household plans Spotify 21% Y/Y Revenue growth driven by Premium Total Revenue grew 21% Y/Y to €3.0 billion Premium Revenue grew 22% Y/Y to €2.7 billion Ad-Supported Revenue grew 19% Y/Y to €385 million led by Podcasting Audiobooks launched in the United States Launched the first iteration of Audiobooks in the Spotify app for listeners in the United States Announced the acquisition of interactive music trivia game, Heardle On October 5th, we announced the acquisition of Kinzen to further enhance our approach to platform safety 4#5Key Highlights: Actuals vs. Guidance Users Financials Spotify Monthly Active Users (M) Premium Subscribers (M) Total Revenue (€M) Gross Margin Operating (Loss)/Income (€M) Results Above Above Results Above Below Below Q3 2022 Actuals 456 195 Q3 2022 Actuals €3,036 24.7% (€ 228) Guidance 450 194 Guidance €3,000 25.2% (€ 218) 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 Operating (Loss)/Income Operating Margin FREE CASH FLOW & LIQUIDITY (EM, unless otherwise denoted) Net Cash Flows From Operating Activities Free Cash Flow¹ Cash & Cash Equivalents, Restricted Cash & Short Term Investments (EB) Spotify Q3 2021 381 172 220 2,178 323 2,501 668 26.7% 75 3.0% 123 99 3.3 Q4 2021 406 180 236 2,295 394 2,689 712 26.5% (7) (0.3%) 119 103 3.6 Q1 2022 ¹ Free Cash Flow is a non-IFRS measure. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. 422 182 252 2,379 282 2,661 671 25.2% (6) (0.2%) 37 22 3.6 Q2 2022 433 188 256 2,504 360 2,864 704 24.6% (194) (6.8%) 39 37 3.6 Q3 2022 456 195 273 750 24.7% 2,651 22% 385 19% 3,036 21% (228) (7.5%) Y/Y 40 35 3.7 20% 13% 24% 12% -- -- -- 7#8Financial Summary Revenue Profitability Free Cash Flow & Liquidity Spotify Revenue of €3,036 million grew 21% Y/Y in Q3 (or 12% Y/Y constant currency), reflecting: Premium Revenue growth of 22% Y/Y (or 13% Y/Y constant currency), led by subscriber gains; and Ad-Supported Revenue growth of 19% Y/Y (or 3% Y/Y constant currency), led by podcasting Gross Margin was 24.7% in Q3, down 201 bps Y/Y reflecting: Continued growth in Marketplace activity and favorable revenue mix shift to podcasting; offset by Non-music content and product enhancement spend, as well as increased publishing rates and an adjustment to prior period accruals. Operating Loss of (€228) million reflected the above and Operating Expense growth of 65% Y/Y (or 51% Y/Y constant currency), reflecting: Higher personnel costs primarily due to headcount growth (global ad sales team expansion, platform investment and acquisitions) and higher advertising costs for growth initiatives (Emerging Markets, Gen Z) Currency movements had a negative 1,433 bps impact on expense growth, or €85 million, given the unfavorable geographic mix of employee costs relative to revenue. Free Cash Flow¹ was €35 million in Q3. Capital expenditures decreased €20 million Y/Y to €5 million in the quarter. Liquidity remained strong, with €3.7 billion in cash and cash equivalents, restricted cash and short term investments. At the end of Q3, our workforce consisted of 9,808 FTEs globally. 1 Free Cash Flow is a non-IFRS measure. See "Use of Non-IFRS Measures" and "Reconciliation of IFRS to Non-IFRS Results" for additional information. 8#9Revenue Resilient Premium growth, led by subscribers Premium Revenue grew 22% Y/Y to €2,651 million, reflecting subscriber growth of 13% Y/Y and Premium ARPU¹ growth of 7% Y/Y to €4.63 (or down 1% constant currency). Excluding the impact of FX, ARPU performance was impacted by market mix. Ad-Supported growth driven by podcasting Ad-Supported revenue grew 19% Y/Y and reached 13% of Total Revenue, reflecting double-digit growth across all regions with the exception of Europe where we saw the impact of challenging regional economic conditions. Our music business grew high single digits Y/Y and was led by high single digit growth in impressions sold. Podcast revenue grew in the strong double-digit range Y/Y across both our Original and Exclusive podcasts and the Spotify Audience Network. Podcast growth was led by the Spotify Audience Network, where sold impressions grew strong double-digits and CPMs increased double-digits. We also saw a substantial increase in the number of participating shows and advertisers in the Spotify Audience Network. Spotify €10,000 €8,000 €6,000 €4,000 €2.000 €1,500 €1,000 €500 €0 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Premium Revenue, LTM* (EM) Premium ARPU €6.00 ¹ Premium Average Revenue per User ("ARPU") * Last Twelve Months (LTM) represents annual performance covering the preceding 12 months relative to the last day of the quarter. €5.00 €4.00 €3.00 T Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q221 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Ad-Supported Revenue, LTM* (EM) - Ad-Supported Revenue As % Of Total Revenue €2.00 15% 13% 10% 8% 5% 9#10Gross Margin Marketplace and Podcasting benefits offset by content/product investments and accruals Ad-Supported Gross Margin Total Gross Margin 24.7% 11 Q3'18 Q3'19 Q3'20 Q3'21 Q3'22 Gross Margin finished at 24.7% in Q3, reflecting continued Y/Y benefit from Marketplace and revenue mix shift towards podcasts, offset by non-music content and product enhancement spend, increased publishing rates and an unfavorable change in historical estimates for rights holder liabilities. Spotify Premium Gross Margin 28.0% Q3'18 Q3'19 Q3'20 Q3'21 Q3'22 Premium Gross Margin was 28.0% in Q3, down 104 bps Y/Y, reflecting Marketplace growth, offset by product enhancement spend, increased publishing rates and the change in accruals. II Q3'19 Q3'18 Q3'20 Q3'21 1.8% Q3'22 Ad-Supported Gross Margin was 1.8% in Q3, down 902 bps Y/Y, reflecting favorable revenue mix shift towards podcasts and Marketplace growth, offset by non-music content spend and product enhancement spend, increased publishing rates and the change in accruals. 10#11Operating Expenses Growth largely driven by headcount expansion and unfavorable FX impact Operating Expenses grew 65% Y/Y (or 51% constant currency), largely reflecting various growth initiatives that were greenlit toward the end of 2021 and the impact of recent acquisitions such as Podsights, Findaway, Sonantic, Chartable, Whooshkaa and Heardle. Additionally, Y/Y comparisons were affected by the prior year benefit from Social Charge movements, which did not recur in Q3'22. 2022 continues to be an investment year for Spotify, as we build out the resources and infrastructure necessary to drive our multi-modal, multi-vertical strategy forward. We continue to re-evaluate our spending with an eye towards increasing return efficiency and enhancing productivity across the organization. We remain focused on gaining favorable Operating Expense leverage as we progress towards the intermediate-to-long-term targets we conveyed at our 2022 Investor Day. Spotify 54% 40% Sales & Marketing Q3'22 Y/Y Growth 86% 72% 52% 37% Research & Development General & Administrative Q3'22 Y/Y Growth Constant Currency 11#12Free Cash Flow The 10th quarter in a row of positive FCF Free Cash Flow was €35 million in Q3, a decrease Y/Y as lower Net Income adjusted for non-cash items was partially offset by favorability in net working capital. Capital expenditures decreased €20 million Y/Y to €5 million as a result of the completion of office build-outs. This was the 10th quarter in a row of positive Free Cash Flow. While the magnitude of Free Cash Flow can fluctuate from quarter to quarter based on seasonality and timing, we have averaged over €200 million of positive Free Cash Flow on a trailing 12 month basis for the past three years. Spotify €500 € 400 €300 €200 €100 €0 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 * Last Twelve Months (LTM) represents annual performance covering the preceding 12 months relative to the last day of the quarter. Free Cash Flow, LTM* (€M) 12#13MAUS & SUBSCRIBERS 13#14Monthly Active Users (MAUS) Total MAUS grew 20% Y/Y to 456 million, up from 433 million last quarter and above our guidance by 6 million. Quarterly performance versus our guidance was impacted by: Outperformance across all regions Better than expected intake in India as a result of a multimedia marketing campaign driving activations and reactivations Spotify Strength across Latin America, led by Brazil, due to marketing and OEM strength 11% 22% 31% 36% Q3'18 16% Rest of World 22% 27% 35% Q3'19 19% 22% 25% 34% Q3'20 Latin America 21% 22% 24% 34% Q3'21 North America 26% 21% 22% 31% Q3'22 Europe 14#15Premium Subscribers Our Premium Subscribers grew 13% Y/Y to 195 million, up from 188 million last quarter. Quarterly performance versus our guidance was impacted by: ● Spotify Outperformance across all regions led by Latin America Better than expected Q3 promotional campaign results across all regions Continued strength in multi-user plans 9% 20% 31% 40% Q3'18 10% Rest of World 20% 30% 40% Q3'19 10% 21% 29% 40% Q3'20 Latin America 11% 20% 29% 40% Q3'21 North America 12% 21% 28% 39% Q3'22 Europe 15#16PRODUCT & PLATFORM 16#17Audiobooks Spotify Listen to music, podcasts, and now Audiobooks. 9:41 Audiobooks Great first audiobooks THEY BOTH DIE AT THE END ADAM SILVERA They Both Die At The End Adam Silvera Spotify STEPHEN KING FAIRY TALE Fairy Tale Stephen King At the end of September, the ability to purchase and listen to more than 300,000 audiobooks titles became available to Spotify listeners in the United States. This is the first iteration of the audiobooks experience for users on Spotify and fits seamlessly alongside preexisting music and podcast content. 17