Spotify Technology S.A.

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Spotify Technology S.A.  (NYSE:SPOT)
Q4 2018 Earnings Conference Call
Feb. 06, 2019, 8:00 a.m. ET

Contents:

Prepared Remarks:

Operator

Welcome to Spotify's Fourth Quarter 2018 Financial Results Question and Answer Session. A copy of the company's shareholder letter issued pre-market open today, is available on the Investor Relations website investors.spotify.com.

This call is being recorded and an archive replay will be available on the IR site after the event concludes.

I will now turn the call over to Paul Vogel, Head of Investor Relations and FP&A. You may now begin your conference.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Great. Thanks, Josh. Thank you, and welcome to Spotify's fourth quarter and fiscal 2018 earnings conference call. With us today are Daniel Ek, Spotify's CEO; and Barry McCarthy, Spotify's CFO.

The format of today's call will be similar to the last few quarters. Daniel will give a few brief opening remarks followed by a online question and answer session. Questions can be submitted either through the widget alongside the webcast or by emailing directly to ir@spotify.com. We'll get to as many questions as we can, and the call will last approximately 30 minutes.

Before we begin, let me quickly cover the Safe Harbor. During this call, we will make forward-looking statements, including projections or estimates about the future performance of the company. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed on today's call, and in our letter to shareholders, and filings with the Securities and Exchange Commission.

During this call, we will refer to certain non-IFRS financial measures. Reconciliations between our IFRS and non-IFRS financial measures can be found in our letter to shareholders on the financial section of the Investor Relations page of our website, and also furnished today on Form 6K.

And with that, I will turn it over to Daniel.

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

All right. Thanks, Paul, and thanks, everyone for joining today's call. Our fourth quarter results were strong and outperformed our expectations. During Q4, our footprint -- footprint expanded to 78 countries from 65, as we launched our service across 13 countries in the Middle East and North Africa in mid-November. We also reached an important milestone as user listened to more than 15 billion hours of content on the platform, and we surpassed more than 200 million monthly active users worldwide.

That's very impressive growth, but we have a much bigger vision for what this business can become. And that is why I've shared a blog post outlining our vision as an audio first company and our mission to become the world's leading audio platform.

Today, audio is only one-tenth of the size of the video market. So there is a massive opportunity here for audio to evolve into a more personalized, more immersive experience, much like how the video industry has evolved.

We believe that over time, more than 20% of all listening on Spotify will be non-music content, and we strongly believe that this opportunity in audio starts with podcasting. I believe podcast will continue to evolve in endless ways to tell stories that entertain, educate, challenge, inspire and bring us together and breakdown cultural barriers. We've only just dipped our toe into the podcasting space and already Spotify has become the second biggest podcasting platform in the world in just under two years.

We're still considerably smaller than our largest competitor, which means that there is tremendous opportunity for continued fast growth. Our users love having podcast as part of their Spotify experience, and our podcast users are almost twice as engaged as non-podcast listeners on our platform, and as a result, spend even more time listening to music. While podcasting is still a relatively small business today, I see incredible growth potential for the space and for Spotify.

Today, in addition to our earnings, we announced the acquisition of two podcasting companies, Gimlet and Anchor. Gimlet is one of the best content creators in the world with unique celebrity podcast shows like Homecoming, which was recently adapted and critically acclaimed show on Amazon Prime, and the Internet culture hit, Reply All.

Anchor is the leading publishers for new podcast globally and has completely reimagined the path to audio creation, enabling distribution for the next generation of podcasters worldwide. We're really excited to welcome these incredible, creative and talented companies to Spotify. And with these acquisitions, we will offer the best content, the best discovery and the best user experience for consumers, and we're also positioned to become the leading platform for podcast creators, as well as the leading producers of podcast globally. As I hope you can tell, we're very confident about our path forward and we strive to become the world's number one audio platform.

And with that, let's open the floor for questions.

Questions and Answers:

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Great. Thanks, Daniel. Our first question comes from Justin Patterson at Raymond James.

Daniel, your for the record blog today, you mentioned that the competitive set could evolve to face other forms of entertainment and informational services over time. Please elaborate on that point, and how that influences long-term engagement? Should you goal to have non-music content represent 20% of listening hours to be perceived as truly incremental to listening hours?

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

Well, there's this huge space today, which is radio, which currently is about two hours of listening globally, every single day. Then in that space, much like in the video space, we are going from a linear world to an on-demand world. So that listening in moving online. And as part of that, Spotify is already a huge part just with music alone. And what we're seeing with podcast is that, the users, who are listening to podcasting on the platform is almost twice as engaged on the platform too.

So we do think there is a huge opportunity, not just to get new users onto the platform, but get our existing users to engage way more over the platform as well.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Great. Our next question comes from Michael Pye at Baillie Gifford.

For Daniel, please may you offer some color on how you progress your mission of enabling 1 million artists to live off their arts. By that I mean both numerically i.e., What metrics do you consider to be most important, but also qualitatively through hours engagement and tools like soundtrack and direct upload?

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

Well, it's a metric that we track internally quite a lot. We look at specifically how many of artists that are reaching more than 10,000 fans per month. How many of them are reaching over 1 million listeners per month as well. And that number is showing very, very steady progress across both of those groups of artists.

Obviously, the lower end of this year, maybe the difference between whether you're a part-time musician and full-time decision, and the upper end of this year is whether you're becoming a global superstar or potential superstar.

So that's sort of quantitative way of doing this, but we're also obviously trying to reduce the barriers, because the truth of it, as I have mentioned on previous calls, today, distributing a record while in theory, (ph) it's very cheap to put it on the Internet, the reality is it's just way more competition to get heard, and it's harder than ever, which means the record labels, publishers and everyone in this industry has to spend a lot more capital in order to promote and market these assets, and we want to bring that cost down, and make the system more efficient for everyone.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Our next question comes from Ross Sandler at Barclays.

1Q '19 gross margins are being guided down year-on-year, and this is likely before the signing of the new label agreements. Any color on what is driving this decline given the expansion experienced throughout 2018? Is that just a 30 basis points from acquisitions or anything else you can call out, or the factors driving gross margins decline in 2019?

W. Barry McCarthy -- Chief Financial Officer

Ross, let me answer it this way. If the question is, what's the gross margin structure of the business at the core business ex-podcast and related investments and the related acquisitions, post of new label agreements, we see it unchanged from the margin structure in Q4 of 2018.

So in Q4, 2018, the margin was 26.7% or about 90 basis points of onetime non-recurring items. So I think of the base business, gross margin as -- would that be 24.8% --

Paul Aaron Vogel -- Head of Investor Relations and FP&A

25.8%

W. Barry McCarthy -- Chief Financial Officer

Excuse me 25.8%. You think I'd be able do that in my head. 25.8% on a go-forward basis, post legal renegotiations.

So what you're seeing in our -- the delta that you're seeing in our forecast consists of all the costs associated with the acquisition, the cost of running their business plus some of the transaction related expenses to find their way into the P&L plus increased investments, we're making on our own independent of the acquisitions and the -- to originate podcast content on the platform.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Our next question comes from Doug Anmuth at JPMorgan.

On the heels of the acquisitions announced today, can you talk more about your podcast strategy? What do you learn thus far around how podcast attract the users on the platform, they're listening to music more than the average spotify user? What does the model look like for podcast exclusivity in terms of upfront costs and revenue sharing and contract duration?

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

I'll -- want to say that we're still kind of early on in this game, that said in Q4 alone, we had 14 shows exclusive to Spotify. And what we were seeing from those is a few different things. We're seeing, as I mentioned earlier, that people engage almost twice the rates than non-podcast listeners. We're seeing that there are users who wouldn't have considered Spotify otherwise, that are now signing up to the platform.

And then thirdly, you could probably guess over time that, that may have an implication on churn, and although, we don't know that at this point. So I think we're encouraged by the early results. I think in terms of deal structure on these podcasts, it's still something that we are experimenting with, but we are certainly in the game of producing more of that content ourselves.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Next question comes from Rich Greenfield at BTIG.

While the high end of your guidance assumes a meaningful acceleration in net adds, curious where the bottom end of today sub guidance which forecasts a slowdown in net adds versus 2018, what are the key swing factors?

W. Barry McCarthy -- Chief Financial Officer

Rich, there are two objectives in giving guidance, one is to help you understand where we think the business is going to land and the other is defensive. So the ranges are in there for defensive reasons. In terms of expectations of performance, we've told you our intention is to land at the 70th percentile of the range of the guidance we give.

So sometimes shit happens, when that happens, we might end up at the bottom end of the range. It's not likely, it's not the expected outcome, but it could. And so we built it into our forecast.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Our next question comes from Anthony DiClemente at Evercore ISI.

You talked about churn increasing sequentially in Q1, but that this was seasonal given Q4 campaigns. Can you talk more broadly about promotional activity? Is it possible that these promotions are encouraging consumers to jump in and out of computing services?

W. Barry McCarthy -- Chief Financial Officer

Let me jump in here Anthony, the year-over-year trend in churn is down. There are seasonal churn effects associated with let's say the holiday campaign in our business just like, there was at Netflix. But the macro trend here is increased engagement, increased retention, lower churn. And I want to talk about the implications for lifetime value as a result. We frequently get questions about ARPU and I know investors have lots of concern about the continued decrease in ARPU, but from where I sit when we look at the three dimensional chessboard factored in a better user experience we've provided, we don't see a decrease in revenue, in fact, the subscribers who are paying us at a lower ARPU are earning exactly the same lifetime revenue in Q4 of 2018 that they earned in Q4 of 2017, because churn has decreased the $1 divided by the lower churn rate is more months of service at a lower ARPU is exactly to the dollar, the same lifetime revenue, and now it also happens that we have higher gross margin on a year-over-year basis.

So the contribution profit from that same revenue stream is actually higher, the labels are earning the same amount of revenue they earned a year ago, even though, price is down, we're growing faster and subscriber acquisition costs are down on a per subscriber basis. And the LTV to SAC ratio on a year-over-year basis is up by 40%.

So the point being, this is about driving a virtuous cycle, improving the user experience, podcast is another dimension and driving more lifetime value and driving more profit as a consequence by investing in the user experience.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Great. And next question comes from Matthew Thornton at SunTrust.

Any color on early impact from the Samsung partnership, the Google Home promotion student plan bundle et cetera? How prominent will new distribution partners and promotions be going forward?

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

As we said during our Investor Day, ubiquity and being on all platforms is the important part of the Spotify strategy. We are already on over 500 different devices, including, of course, TV screens, voice speakers, cars, et cetera. So it's a hugely important part for us to try to do those types of partnerships.

Again, say that with the breadth of the partnerships that we have that, that I can single out any of those partnerships over time, that said, Samsung, obviously, remains a very important partner to us as thus Amazon and Google and others in the space.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Our next question comes from Ben Swinburne at Morgan Stanley.

Given the guidance for gross margin compression in '19 , can you explain what drives it to your long-term gross margin guidance of 30% to 35%? And what that time line looks like? Additionally what's driving the gross margin pressure implied in the guidance?

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

Oh let's just kind of level set. Nothing has changed in terms of our long-term guidance of getting there. As Barry mentioned, this primarily is about our investment in original content, and then it is primarily about driving that virtuous cycle. What we see very clearly, a we are investing in more podcast companies, engagement goes up, and as engagement goes up, we both broaden the appeal to new users, but we also increased engagement of the existing ones on the platform, which drives down churn, which in turn makes the business overall much stronger, that's the continued path. And if that happened, and if you also layer on top of it, our marketplace, business and the trend where gross margin on the core business keeps increasing, that's our expectation that this will happen over time as well.

W. Barry McCarthy -- Chief Financial Officer

If I could draw a Netflix analogy. And remember, when we launched streaming Netflix first year, we spent $50 million (ph) and then every year after that we doubled it, and it came right out of the margin structure of the business, but it greatly enhanced the value proposition for users, and over time, it shifted the cost structure from variable to fixed, there are many similar analogies that have the opportunity to play out here as well. And in addition, there is a ad revenue dimension to this, because, currently ads are embedded in podcast of both free and paid user base.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Our next question comes from John Egbert at Stifel.

In your first two podcast acquisitions, it looks like one was about technology and the other about content. In regards to the $400 million to $500 million, you earmarked for acquisitions in 2019. Do you expect to be more focused on acquiring content or technology? And more broadly, can you explain why it makes more sense to take ownership or (ph) book more content when you're historically been hesitant to own music content?

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

I think there are two very, very different businesses. We've spoken in the past about the music industry and not being a space, where exclusivity makes sense for a number of different reasons, but including one of them, that music, radio can put any piece of music up. So exclusivities won't have the same effect, as you won't be able to keep it exclusive.

And the second thing obviously is the artists and the label have the incentive to push the content out in many places as possible, because so much of an artist revenue derives from touring. I think in audio and certainly in podcast, the dynamics is very, very different, and what we're doing here and what we're excited about is really building the market, it's at a very, very different stage of maturity. So we're investing in that and we think we can be one of the tent-pole players in that space. And as Barry mentioned too that affords us a very different economic model long-term.

W. Barry McCarthy -- Chief Financial Officer

John, the only other point I'd like to make is that out of the $400 million to $500 million of which we have line of sight. The two acquisitions we announced today are included in that number, the number is not additive to the cost of the acquisitions we announced today. More likely than not any additional acquisitions will be in the podcast space, we're not commenting on whether it's infrastructure or content.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

All right. Great. Our next question comes from Mark Kelley at Instinet.

What's embedded into your full year guidance in terms of premium ARPU declines and ad-supported ARPU growth?

W. Barry McCarthy -- Chief Financial Officer

ARPU decline of about 5 percentage points. Sorry, the second part of the question was?

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Growth in ad-supported ARPU?

W. Barry McCarthy -- Chief Financial Officer

Yeah, we don't break out that level of detail. I will say that on a CPM basis, we saw pretty strong growth across the ad business in Q4, particularly in the video space, where the growth was significant.

Heath Terry -- Goldman Sachs -- Analyst

Next question from Heath Terry at Goldman Sachs.

What are your goals around royalty rates, product offering, content or geographic access, data and marketing sharing et cetera in your negotiations with the labels? What do you believe their goals are in these negotiations beyond royalty rates?

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

As I have said before, I think the primary focus of these upcoming renewals is really around the marketplace strategy. The marketplace strategy supporting, because it's not a win-lose scenario, but it's truly a win-win scenario. By building tools and services for the music industry, we can make the music industry more efficient thereby, jointly benefiting together with the music industry at that. That also happens to be one of the bigger points for the music industry. But if I would boil it all down to one thing, it's continued top line growth being the number one focus for everyone in music industry.

Lloyd Walmsley -- Deutsche Bank -- Analyst

Next question comes from Lloyd Walmsley at Deutsche Bank.

Your release underscored the importance of smart speakers for driving audio content, do you think this is a core driver of premium sub-add engagement or both, what more can you do here beyond the Google Home promotion?

W. Barry McCarthy -- Chief Financial Officer

I'll let Daniel talk about growth in the audio speaker ecosystem and our strategy for success there. With respect to the Google Home promotion, as -- I think we said previously that plus the holiday campaign were big drivers of growth in Q4, and we see additional opportunities for growth in bundling in the hardware space.

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

Yeah. I think my only addition is, it's a fast-growing segment for us. We see meaningful engagement from the customers that are using it. We're well positioned in all these platforms. Customers are asking for Spotify and want to use Spotify, whether on in Amazon, Alexa or on a Google Home speaker, and obviously because of our ubiquity strategy, we want to be on all of these places, and we're working with all of these partners in getting that.

Michael Morris -- Guggenheim -- Analyst

Next question comes from Michael Morris from Guggenheim.

Do you pay the all-in copyright royalty rate as established by CRB last year? If you pay less, as we assume, can you share why and help quantify the rates that Spotify pays?

W. Barry McCarthy -- Chief Financial Officer

It so happens that when the CRB rate was retroactively applied in Q4, it was a net benefit for us. And importantly, the question is what happens on a go-forward basis, and that's roughly neutral and in our guidance for 2019, and by 2020 and it starts to incrementally erode the margin.

Mark Mahaney -- RBC -- Analyst

Next question is from Mark Mahaney at RBC.

Can you provide more color on the traction for the recent launches in EMEA?

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

Yeah. We're pleased with the early results, as I mentioned, in the introductory remarks, we launched mid-November, so we have about two months now of data. All of the markets are looking good, we're seeing good take-up rates and we're seeing customers be very excited about Spotify.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Next question comes from Jessica Reif from Bank of America.

What is the path making podcast acquisitions and podcast investments accretive to gross margin beyond '19?

W. Barry McCarthy -- Chief Financial Officer

Having great content is the long and the short of it, if we can drive a virtuous cycle, we'll win, if we can't, we won't. And virtuous cycle means investing in content that people engage in, seeing overall engagement increase, as a result, the increased engagement, they find more value, so they stay longer, so retentions up, churns down, because they're excited, they tell more friends about the service, so your mix of paid versus free acquisition shifts in favor of free, so your subscriber acquisition costs goes down, even if your gross margins remained constant in that scenario, lifetime value is increasing, you're driving more contribution profit to the bottom line against year your cost base, plus over time, you're shifting your cost base from variable to fixed, which created an enormous amount of operating leverage at Netflix, you may recall with the growth in streaming. And that won't be true for us initially, but I think that will become part of the equation over time.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Next question comes from Victor Hoglund at SEB.

On the two M&A done today, are you paying in cash or equity, or debt or combined? Any indication on users revenue on price, is this mainly a user intake potential or churn potential or combined?

W. Barry McCarthy -- Chief Financial Officer

I'll let Daniel talk about the potential piece of it. Just in terms of the numbers, it's cash, the price will be disclosed in the fullness of time in our SEC filings. I'm not commenting on that today, because we have other transactions in the works. And I don't want the transactions we're closing to bleed over into deals we may be negotiating.

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

I think my addition is, it's really just both here. Why we're doing this is obviously to get a larger library of content and that content is attractive to new users coming onto the platform. But as we're also seeing very clearly from our data, it's also attractive to the people, who are currently using Spotify, as they're engaging more (ph) now. And as Barry mentioned, if they're engaging more, that drives this virtuous cycle.

Eric Sheridan -- UBS -- Analyst

Great. And next question comes from Eric Sheridan at UBS.

When a new region launches Middle East or India, how should investors or analysts think about the upfront costs investment? How the sub base might scale in medium-term margin structure especially versus other developed markets.

W. Barry McCarthy -- Chief Financial Officer

Well, it's pretty straightforward. Initially, we are out of pocket. So growth is, -- it is a net drag on profitability, the size of the initial investment informs us about how big a drag it is. Quite often, their minimum guarantees are negotiated with labels, sometimes gross margins are negative as we scale the business, you see a change in the margin structure, as a result, we saw that quite dramatically with respect to the free business.

This past quarter, the investor letter talks about the significant growth in gross margin resulted from scaling of the free user base. So over time, we moved from negative gross margin to positive gross margin to more positive gross margin and the acquisition cost improves as well.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Great.

A follow from Rich Greenfield, you cannot do exclusivity in music, but you can in podcast. How important is that to your strategy to differentiate from your peers?

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

Exclusivity is definitely an important part of our strategy. Just to be very clear though, the goal is not with Gimlet nor with Anchor to make any of their existing content exclusive. But to focus on the content that we're developing at Spotify and make more exclusive deals going forward.

Operator

Next question comes from Maria Ripps at Canaccord.

Does India's heightened focus on promoting home-grown tech industry change your view on how you approach that market? Is there anything in the new set of rules that would require you to change your normal practices if you do launch in the market in the near-term?

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

We obviously investigate and look at a lot of different factors when we're evaluating which markets we're launching in. Specifically related to the Indian market, I think we're seeing, it's very healthy ecosystem of both home-grown players, but also international players being successful in the marketplace when it comes to other sectors. As such, and combined with the level of user interest that we're seeing for the Spotify brand makes us feel comfortable that we have a good chance of being a very, very strong player in the Indian markets.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

And we'll take a couple of more questions. Next one is from Matt See at Melvin Capital.

Can you guys faster sub growth by increasing sales and marketing spend? Sales and marketing was down in Q4. In other words, how should we think about sales and marketing efficiency -- is efficiency holding up, is that a huge lever for user and sub growth?

W. Barry McCarthy -- Chief Financial Officer

Yes, we have the opportunity to drive faster growth by spending more money efficiently. We know from the LTV to SAC ratio that we've got lots of headroom to drive faster growth. You see our current best thinking about those opportunities reflected in the guidance. If we see our way to faster growth as the calendar year unfolds, you will see us update our thinking about the asset allocation decisions we're making in the marketing funnel in order to drive faster growth.

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

Maybe this is an obvious comment on catch rate as well, but if you look historically at the company, we've predominantly invested in R&D to drive faster growth, that obviously is a fixed -- fixed investment that we can amortize across the whole base of our users. And what you're really seeing now is that we're now also adding content as another kind of lever of that investment. So while we are investing in sales and marketing, there is an important part, where certainly, the weight of all the investments is in R&D and we're confident that we can amortize over the base of our platform

W. Barry McCarthy -- Chief Financial Officer

And we explained that rationale Investor Day when we reminded you, that there are -- in general three ways to grow. One is, geographic expansion, we're pursuing that. One is marketing, on a percentage of revenue, you saw a decline, and the third is invest in the user experience and drive a virtuous cycle. That's been very successful for us from today's guidance that we continue to double down to fund those investments. I do want to say, by the way, that, our guidance assumes all of the costs that we anticipate to incur in the calendar year associated with both acquisitions that we announced today and the acquisitions that we hope to close that are part and parcel of the $400 million to $500 million.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

And we'll take one last question, a follow-up from Ben Swinburne.

The 2018 advertising revenues meet your expectations, are the investments in self-serve and programmatic able to accelerate growth in '19?

W. Barry McCarthy -- Chief Financial Officer

Programmatic is growing super-fast and we are seeing shifts and in our most developed markets like the US and the UK, Australia, New Zealand from direct to programmatic. Self-serve is our fastest growing channel. So in that way, it's additive to the overall performance of the business. But even, notwithstanding that fact, it's still relatively small in the grand scheme of things. So we continue to invest aggressively from an R&D perspective in growing that channel, we need that channel to be successful for us over time in order to right size our cost structure but we're starting off with a very small base.

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Great. And with that, everyone, we'll close our Q4 call, if you have any additional questions, we'll be around all day. Please feel free to email the IR team at ir@spotify.com and we look forward to speaking with everyone again real soon. Thank you.

Operator

This concludes today's conference call. You may now disconnect.

Duration: 33 minutes

Call participants:

Paul Aaron Vogel -- Head of Investor Relations and FP&A

Daniel Ek -- Co-founder, Chief Executive Officer, and Chairman of our board of directors

W. Barry McCarthy -- Chief Financial Officer

Heath Terry -- Goldman Sachs -- Analyst

Lloyd Walmsley -- Deutsche Bank -- Analyst

Michael Morris -- Guggenheim -- Analyst

Mark Mahaney -- RBC -- Analyst

Eric Sheridan -- UBS -- Analyst

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