Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Trading Symbol | SPOT |
Entity Registrant Name | Spotify Technology S.A. |
Entity Central Index Key | 0001639920 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock Shares Outstanding | 184,325,957 |
Entity Voluntary Filers | No |
Entity Address, Address Line One | 42-44 |
Entity Address, Address Line Two | avenue de la Gare |
Entity Address, City or Town | L- 1610 Luxembourg |
Entity Address, Country | LU |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
Security Exchange Name | NYSE |
Title of 12(b) Security | Ordinary Shares (par value of €0.000625 per share) |
Document Transition Report | false |
Entity Interactive Data Current | Yes |
Entity File Number | 001-38438 |
Entity Incorporation, State or Country Code | N4 |
Document Shell Company Report | false |
Document Registration Statement | false |
Document Accounting Standard | International Financial Reporting Standards |
Document Annual Report | true |
Business Contact [Member] | |
Document Information [Line Items] | |
Entity Address, Address Line One | 150 Greenwich Street |
Entity Address, Address Line Two | 63rd Floor |
Entity Address, City or Town | New York |
Contact Personnel Name | Horacio Gutierrez |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10007 |
Consolidated statement of opera
Consolidated statement of operations - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Revenue | € 6,764 | € 5,259 | € 4,090 |
Cost of revenue | 5,042 | 3,906 | 3,241 |
Gross profit | 1,722 | 1,353 | 849 |
Research and development | 615 | 493 | 396 |
Sales and marketing | 826 | 620 | 567 |
General and administrative | 354 | 283 | 264 |
Total operating expense | 1,795 | 1,396 | 1,227 |
Operating loss | (73) | (43) | (378) |
Finance income | 275 | 455 | 118 |
Finance costs | (333) | (584) | (974) |
Share in (losses)/earnings of associate | 0 | (1) | 1 |
Finance income/(costs) - net | (58) | (130) | (855) |
Loss before tax | (131) | (173) | (1,233) |
Income tax expense/(benefit) | 55 | (95) | 2 |
Net loss attributable to owners of the parent | € (186) | € (78) | € (1,235) |
Net loss per share attributable to owners of the parent | |||
Basic | € (1.03) | € (0.44) | € (8.14) |
Diluted | € (1.03) | € (0.51) | € (8.14) |
Weighted-average ordinary shares outstanding | |||
Basic | 180,960,579 | 177,154,405 | 151,668,769 |
Diluted | 180,960,579 | 181,210,292 | 151,668,769 |
Consolidated statement of compr
Consolidated statement of comprehensive (loss)/ income - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Comprehensive Income [Abstract] | |||
Net loss attributable to owners of the parent | € (186) | € (78) | € (1,235) |
Items that may be subsequently reclassified to consolidated statement of operations (net of tax): | |||
Change in net unrealized gain or loss on short term investments | 5 | 1 | (1) |
Change in net unrealized gain or loss on cash flow hedging instruments | (3) | (1) | 0 |
Exchange differences on translation of foreign operations | 4 | (8) | (3) |
Items not to be subsequently reclassified to consolidated statement of operations (net of tax): | |||
(Loss)/gain in the fair value of long term investments | (117) | 572 | (11) |
Other comprehensive (loss)/income for the year (net of tax) | (111) | 564 | (15) |
Total comprehensive (loss)/income for the year attributable to owners of the parent | € (297) | € 486 | € (1,250) |
Consolidated statement of finan
Consolidated statement of financial position - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Non-current assets | ||
Lease right-of-use assets | € 489 | € 0 |
Property and equipment | 291 | 197 |
Goodwill | 478 | 146 |
Intangible assets | 58 | 28 |
Long term investments | 1,497 | 1,646 |
Restricted cash and other non-current assets | 69 | 65 |
Deferred tax assets | 9 | 8 |
Non-current assets | 2,891 | 2,090 |
Current assets | ||
Trade and other receivables | 402 | 400 |
Income tax receivable | 4 | 2 |
Short term investments | 692 | 915 |
Cash and cash equivalents | 1,065 | 891 |
Other current assets | 68 | 38 |
Current assets | 2,231 | 2,246 |
Total assets | 5,122 | 4,336 |
Equity | ||
Share capital | 0 | 0 |
Other paid in capital | 4,192 | 3,801 |
Treasury shares | (370) | (77) |
Other reserves | 924 | 875 |
Accumulated deficit | (2,709) | (2,505) |
Equity attributable to owners of the parent | 2,037 | 2,094 |
Non-current liabilities | ||
Lease liabilities | 622 | 0 |
Accrued expenses and other liabilities | 20 | 85 |
Provisions | 2 | 6 |
Deferred tax liabilities | 2 | 2 |
Non-current liabilities | 646 | 93 |
Current liabilities | ||
Trade and other payables | 549 | 427 |
Income tax payable | 9 | 7 |
Deferred revenue | 319 | 258 |
Accrued expenses and other liabilities | 1,438 | 1,076 |
Provisions | 13 | 42 |
Derivative liabilities | 111 | 339 |
Current liabilities | 2,439 | 2,149 |
Total liabilities | 3,085 | 2,242 |
Total equity and liabilities | € 5,122 | € 4,336 |
Consolidated statement of chang
Consolidated statement of changes in equity/(deficit) - EUR (€) € in Millions | Total | Number of Ordinary Shares Outstanding | Share Capital | Treasury Shares | Other Paid in Capital | Other Reserves | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2016 | 149,924,000 | ||||||
Beginning balance at Dec. 31, 2016 | € (240) | € 0 | € 830 | € 122 | € (1,192) | ||
Loss for the year | (1,235) | 0 | 0 | 0 | (1,235) | ||
Other comprehensive income (loss) | (15) | 0 | 0 | (15) | 0 | ||
Issuance of shares upon exercise of stock options and restricted stock units | 29 | 0 | 29 | 0 | 0 | ||
Issuance of shares upon exercise of stock options and restricted stock units, shares | 1,723,080 | ||||||
Issuance of share-based payments in conjunction with business combinations | 0 | ||||||
Restricted stock units withheld for employee taxes | 0 | ||||||
Issuance of shares related to business combinations | 33 | 0 | 33 | 0 | 0 | ||
Issuance of shares related to business, shares | 442,040 | ||||||
Issuance of restricted share awards related to business combination | 0 | 0 | 0 | 0 | 0 | ||
Issuance of restricted share awards related to business combination, shares | 61,880 | ||||||
Issuance of shares upon exchange of Convertible Notes | 686 | 0 | 686 | 0 | 0 | ||
Issuance of shares upon exchange of Convertible Notes, shares | 6,554,960 | ||||||
Issuance of shares in exchange for long term investment | 910 | 0 | 910 | 0 | 0 | ||
Issuance of shares in exchange for long term investment, shares | 8,552,440 | ||||||
Share-based payments | 67 | 0 | 0 | 67 | 0 | ||
Income tax impact associated with share-based payments | 3 | 3 | |||||
Ending balance at Dec. 31, 2017 | 238 | 0 | 2,488 | 177 | (2,427) | ||
Ending balance (in shares) at Dec. 31, 2017 | 167,258,400 | ||||||
Loss for the year | (78) | 0 | 0 | 0 | (78) | ||
Other comprehensive income (loss) | 564 | 564 | |||||
Issuance of ordinary shares | 4 | 4 | |||||
Issuance of ordinary shares, shares | 5,776,920 | ||||||
Repurchases of ordinary shares | € (77) | € (77) | |||||
Repurchases of ordinary shares, Shares | (6,427,271) | (6,427,271) | |||||
Issuance of shares upon exercise of stock options and restricted stock units | € 163 | 0 | 163 | 0 | 0 | ||
Issuance of shares upon exercise of stock options and restricted stock units, shares | 4,816,072 | ||||||
Issuance of share-based payments in conjunction with business combinations | 0 | ||||||
Restricted stock units withheld for employee taxes | (2) | (2) | |||||
Issuance of shares upon exchange of Convertible Notes | 1,146 | 0 | 1,146 | 0 | 0 | ||
Issuance of shares upon exchange of Convertible Notes, shares | 9,431,960 | ||||||
Share-based payments | 88 | 0 | 0 | 88 | 0 | ||
Income tax impact associated with share-based payments | 48 | 0 | 0 | 48 | 0 | ||
Ending balance (Previously stated) at Dec. 31, 2018 | 2,094 | (77) | 3,801 | 875 | (2,505) | ||
Ending balance (Cumulative effect adjustment in connection with the adoption of IFRS 16) at Dec. 31, 2018 | (18) | (18) | |||||
Ending balance (After adoption of IFRS 16) at Dec. 31, 2018 | 2,076 | (77) | 3,801 | 875 | (2,523) | ||
Ending balance at Dec. 31, 2018 | 2,094 | ||||||
Ending balance (in shares) (Previously stated) at Dec. 31, 2018 | 180,856,081 | ||||||
Ending balance (in shares) (After adoption of IFRS 16) at Dec. 31, 2018 | 180,856,081 | ||||||
Loss for the year | (186) | 0 | 0 | 0 | (186) | ||
Other comprehensive income (loss) | (111) | 0 | 0 | (111) | 0 | ||
Repurchases of ordinary shares | € (433) | (433) | |||||
Repurchases of ordinary shares, Shares | (3,679,156) | (3,679,156) | |||||
Issuance of shares upon exercise of stock options and restricted stock units | € 154 | 0 | 140 | 14 | 0 | 0 | |
Issuance of shares upon exercise of stock options and restricted stock units, shares | 3,557,405 | ||||||
Issuance of shares upon exercise of, or net settlement of, warrants | 377 | 377 | |||||
Issuance of shares upon exercise of, or net settlement of warrants, shares | 3,591,627 | ||||||
Issuance of share-based payments in conjunction with business combinations | 13 | 13 | |||||
Restricted stock units withheld for employee taxes | (6) | (6) | |||||
Share-based payments | 127 | 0 | 0 | 127 | 0 | ||
Income tax impact associated with share-based payments | 26 | 0 | 0 | 26 | 0 | ||
Ending balance at Dec. 31, 2019 | € 2,037 | € 0 | € (370) | € 4,192 | € 924 | € (2,709) | |
Ending balance (in shares) at Dec. 31, 2019 | 184,325,957 |
Consolidated statement of cash
Consolidated statement of cash flows - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Net loss | € (186) | € (78) | € (1,235) |
Adjustments to reconcile net loss to net cash flows | |||
Depreciation of property and equipment and lease right-of-use assets | 71 | 21 | 46 |
Amortization of intangible assets | 16 | 11 | 8 |
Share-based payments expense | 122 | 88 | 65 |
Finance income | (275) | (455) | (118) |
Finance costs | 333 | 584 | 974 |
Income tax expense/(benefit) | 55 | (95) | 2 |
Other | 13 | 8 | (4) |
Changes in working capital: | |||
Increase in trade receivables and other assets | (27) | (61) | (112) |
Increase in trade and other liabilities | 454 | 291 | 447 |
Increase in deferred revenue | 59 | 38 | 77 |
(Decrease)/Increase in provisions | (35) | (17) | 8 |
Interest paid on lease liabilities | (37) | 0 | 0 |
Interest received | 14 | 18 | 19 |
Income tax (paid)/received | (4) | (9) | 2 |
Net cash flows from operating activities | 573 | 344 | 179 |
Investing activities | |||
Business combinations, net of cash acquired | (331) | (9) | (49) |
Purchases of property and equipment | (135) | (125) | (36) |
Purchases of short term investments | (901) | (1,069) | (1,386) |
Sales and maturities of short term investments | 1,163 | 1,226 | 1,080 |
Change in restricted cash | 2 | (10) | (34) |
Other | (16) | (35) | (10) |
Net cash flows used in investing activities | (218) | (22) | (435) |
Financing activities | |||
Payments of lease liabilities | (17) | 0 | 0 |
Lease incentives received | 15 | 0 | 0 |
Repurchases of ordinary shares | (438) | (72) | 0 |
Proceeds from exercise of stock options | 154 | 163 | 29 |
Proceeds from exercise of warrants | 74 | 0 | 0 |
Proceeds from issuance of warrants | 15 | 0 | 9 |
Other | (6) | 1 | (4) |
Net cash flows (used in)/from financing activities | (203) | 92 | 34 |
Net increase/(decrease) in cash and cash equivalents | 152 | 414 | (222) |
Cash and cash equivalents at January 1 | 891 | 477 | 755 |
Net foreign exchange gains/(losses) on cash and cash equivalents | 22 | 0 | (56) |
Cash and cash equivalents at December 31 | 1,065 | 891 | 477 |
Non-cash investing and financing activities | |||
Issuance of shares for business combinations | 0 | 0 | 33 |
Lease right-of-use assets obtained in exchange for lease liabilities | 136 | 0 | 0 |
Purchases of property and equipment in trade and other payables | 14 | 23 | 5 |
Issuance of shares upon exercise of, or net settlement of, warrants | 303 | 0 | 0 |
Issuance of shares upon exchange of Convertible Notes | 0 | 1,145 | 686 |
Issuance of shares in exchange for long term investment | € 0 | € 0 | € 910 |
Corporate information
Corporate information | 12 Months Ended |
Dec. 31, 2019 | |
Corporate Information [Abstract] | |
Corporate information | 1 . Spotify Technology S.A. (the “Company” or “parent”) is a public limited company incorporated and domiciled in Luxembourg. The Company’s registered office is 42-44 avenue de la Gare, L1610, Luxembourg, Grand Duchy of Luxembourg. The principal activity of the Company and its subsidiaries (the “Group”) is audio streaming. The Group’s premium service (“Premium Service”) provides users with unlimited online and offline high-quality streaming access to its catalog of music and podcasts. The Premium Service offers a music listening experience without commercial breaks. The Group’s ad-supported service (“Ad-Supported Service,” and together with the Premium Service, the “Service”) has no subscription fees and generally provides users with limited on-demand online access to the catalog of music and unlimited online access to the catalog of podcasts. The Group depends on securing content licenses from a number of major and minor content owners and other rights holders in order to provide its service. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Summary Of Significant Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2 . The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (a) The consolidated financial statements of Spotify Technology S.A. comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and have been prepared on a historical cost basis, except for securities, long term investments, convertible senior notes (“Convertible Notes”), derivative financial instruments, and contingent consideration, which have been measured at fair value, and lease liabilities, which are measured at present value. The preparation of the consolidated financial statements in conformity with IFRS requires the application of certain critical accounting estimates and assumptions. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas involving a greater degree of judgment or complexity, or areas in which assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 3. The consolidated financial statements provide comparative information in respect of the previous periods. On January 1, 2019, the Group adopted IFRS 16, Leases See Note 12 for further information on comparability following the adoption . (b) Basis of consolidation Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. (c) Foreign currency translation Functional and reporting currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Euro, which is the Group’s reporting currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in the consolidated statement of operations within finance income or finance costs. Group companies The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into Euro as follows: • Assets and liabilities are translated at the closing rate at the reporting date; • Income and expenses for each statement of operation are translated at average exchange rates; and • All resulting exchange differences are recognized in other comprehensive income/(loss). Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the operation and translated at the closing rate at each reporting date. (d) Premium revenue The Group generates subscription revenue from the sale of the Premium Service in which customers can listen on-demand and offline. Premium Services are sold directly to end users and through partners who are generally telecommunications companies that bundle the subscription with their own services or collect payment for the stand-alone subscriptions from their end customers. The Group satisfies its performance obligation, and revenue from these services is recognized, on a straight-line basis over the subscription period. Typically, Premium Services are paid for monthly in advance. Premium partner subscription revenue is based on a per-subscriber rate in a negotiated partner agreement. Under these arrangements, a premium partner may bundle the Premium Service with its existing product offerings or offer the Premium Service as an add-on. Payment is remitted to the Group through the premium partner. The Group assesses the facts and circumstances, including whether the partner is acting as a principal or agent, of all partner revenue arrangements and then recognizes revenues either gross or net. Premium partner services, whether recognized gross or net, have one material performance obligation, that being the delivery of the Premium Service. Additionally, the Group bundles the Premium Service with third-party services and products. In bundle arrangements where the Group has multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative stand-alone selling price. The Group generally determines stand-alone selling prices based on the prices charged to customers. For each performance obligation within the bundle, revenue is recognized either on a straight-line basis over the subscription period or at a point in time when control of the service or product is transferred to the customer. Ad-Supported revenue The Group’s advertising revenue is primarily generated through display, audio, and video advertising delivered through advertising impressions and podcast downloads. The Group enters into arrangements with advertising agencies that purchase advertising on its platform on behalf of the agencies’ clients. These advertising arrangements are typically sold on a cost-per-thousand basis and are evidenced by an Insertion Order (“IO”) that specifies the terms of the arrangement such as the type of ad product, pricing, insertion dates, and number of impressions in a stated period. Revenue is recognized over time based on the number of impressions delivered. The Group also may offer cash rebates to advertising agencies based on the volume of advertising inventory purchased. These rebates are estimated based on expected performance and historical data and result in a reduction of revenue recognized. Additionally, the Group generates Ad-Supported revenue through arrangements with certain advertising exchange platforms to distribute advertising inventory for purchase on a cost-per-thousand basis through their automated exchange. Revenue is recognized over time when impressions are delivered on the platform. (e) Advertising credits that are not transferable are issued to certain rights holders and allow them to include advertisement on the Ad-Supported Service that promote their artists and the Spotify service, such as the availability of a new single or album on Spotify. These are issued in conjunction with the Group’s royalty arrangements for nil consideration. There is no revenue recognized as the advertising credits are mutually beneficial to both the rights holders and the Group and do not meet the definition of a revenue contract under IFRS 15, Revenue from Contracts with Customers. (f) Business combinations are accounted for using the acquisition method. Identifiable assets acquired and liabilities assumed are measured initially at their fair values at the acquisition date. The excess of the consideration transferred, and the acquisition-date fair value of any previous equity interest in the acquiree, over the fair value of the identifiable net assets acquired is recognized as goodwill. In some business combinations, the Group will replace awards held by the employees of the acquiree with its share-based payment awards, whereby the vesting of the Group’s replacement awards is contingent on continued employment with the Group. Replacements of share-based payment awards are accounted for as modifications of the acquiree’s existing share-based payment awards. The value of the replaced acquiree award at acquisition date that relates to pre-combination service is accounted for as part of the consideration transferred. The excess of the value of the Group’s replacement award over the amount attributed to pre-combination services is recognized in the consolidated statement of operations, together with a corresponding credit to other reserves in equity, over the period in which the service conditions are fulfilled. Acquisition-related costs, other than those incurred for the issuance of debt or equity instruments, are charged to the consolidated statement of operations as they are incurred. (g) Cost of revenue consists predominantly of royalty and distribution costs related to content streaming. The Group incurs royalty costs paid to certain music record labels, music publishers, and other rights holders for the right to stream music to the Group’s users. Royalties are typically calculated using negotiated rates in accordance with license agreements and are based on either subscription and advertising revenue earned, user/usage measures, or a combination of these. The determination of the amount of the rights holders’ liability is complex and subject to a number of variables, including the revenue recognized, the type of content streamed and the country in which it is streamed, the product tier such content is streamed on, identification of the appropriate license holder, size of user base, ratio of Ad-Supported Users to Premium Subscribers, and any applicable advertising fees and discounts, among other variables. Some rights holders have allowed the use of their content on the platform while negotiations of the terms and conditions are ongoing. In such situations, royalties are calculated using estimated rates. In certain jurisdictions, rights holders have several years to claim royalties for musical compositions and therefore estimates of the royalties payable are made until payments are made. The Group has certain arrangements whereby royalty costs are paid in advance or are subject to minimum guaranteed amounts. An accrual is established when actual royalty costs to be incurred during a contractual period are expected to fall short of the minimum guaranteed amounts. For minimum guarantee arrangements, for which the Group cannot reliably predict the underlying expense, the Group will expense the minimum guarantee on a straight-line basis over the term of the arrangement. The Group also has certain royalty arrangements where the Group would have to make additional payments if the royalty rates were below those paid to other similar licensors (most favored nation clauses). For rights holders with this clause, a comparison is done of royalties incurred to date plus estimated royalties payable for the remainder of the period to estimates of the royalties payables to other appropriate rights holders, and the shortfall, if any, is recognized on a straight-line basis over the period of the applicable most favored nation clause. An accrual and expense is recognized when it is probable that the Group will make additional royalty payments under these terms. The expense related to these accruals is recognized in cost of revenue. Cost of revenue also includes credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as amounts incurred to produce content for the service. Direct costs incurred to acquire or develop podcasts are recognized as current assets. Cost of revenue includes the consumption of these assets over their useful economic life, which starts at the release of each episode. In most cases, consumption is on an accelerated basis. (h) Research and development expenses are primarily comprised of costs incurred for development of products related to the Group’s platform and service, as well as new advertising products and improvements to the Group’s mobile app, desktop, and streaming services. The costs incurred include related employee compensation and benefits, facility costs, IT costs and consulting costs. (i) Sales and marketing expenses are primarily comprised of employee compensation and benefits, public relations, branding, consulting expenses, customer acquisition costs, advertising, live events and trade shows, amortization of trade name intangible assets, the cost of working with record labels and artists to promote the availability of new releases on the Group’s platform, and the costs of providing free trials of the Premium Service. Expenses included in the costs of providing free trials are primarily derived from per user royalty fees determined in accordance with the rights holder agreements. (j) General and administrative expenses are comprised primarily of employee compensation and benefits for functions such as finance, accounting, analytics, legal, human resources, consulting fees, and other costs including facility and equipment costs, officers’ liability insurance, director fees, and fair value adjustments on contingent consideration. (k) The tax expense for the period comprises current and deferred tax. Tax is recognized in the consolidated statement of operations except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income. (i) Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. (ii) Deferred tax Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for: • Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; • Temporary differences related to investments in subsidiaries, and associates to the extent that the Group is able to control the timing of the reversal of the temporary differences, and it is probable that they will not reverse in the foreseeable future; and • Taxable temporary differences arising on the initial recognition of goodwill. Deferred tax assets are recognized for unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available, against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if certain criteria are met. (iii) Uncertain tax positions In determining the amount of current and deferred income tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes, interest or penalties may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Group to change its judgment regarding the adequacy of existing tax liabilities. Such changes to tax liabilities will impact tax expense in the period that such a determination is made. (l) Policy applicable before January 1, 2019 At inception of an arrangement, the Group determines whether the arrangement is or contains a lease. The Group leases certain items of property and equipment. Leases in which substantially all the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated statement of operations on a straight-line basis over the period of the leases. Leases of property and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease’s commencement at lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the repayment of the liability and finance charges. The corresponding lease obligations, net of finance charges, are included in borrowings. The interest element of the finance cost is charged to the consolidated statement of operations over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term. Policy applicable from January 1, 2019 At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: - The contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; - The Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and - The Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. As a Lessee The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received prior to the commencement date. Any costs related to the removal and restoration of leasehold improvements, which meet the definition of property, plant and equipment under IAS 16 Property Plant and Equipment The lease term is determined based on the non-cancellable period for which the Group has the right to use an underlying asset. The lease term is adjusted, if applicable, for periods covered by extension and termination options to the extent that the Group is reasonably certain to exercise them. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, which is considered the appropriate useful life of these assets. In addition, the right-of-use asset is reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability, to the extent necessary. The lease liability is initially measured at the present value of the lease payments, net of lease incentives receivable, that are not paid at the commencement date, discounted using an incremental borrowing rate if the rate implicit in the lease arrangement is not readily determinable. Lease payments included in the measurement of the lease liability comprise fixed payments, including in-substance fixed payments and variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date. The lease liability is subsequently increased to reflect accretion of interest and reduced for lease payments made The Group leases certain properties under non-cancellable lease agreements that relate to office space. The expected lease terms are between one and fifteen years. The Group does not currently act in the capacity of a lessor. Short-term leases and lease of low-value assets The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets, including certain IT Equipment. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term. (m) Property and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes any expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the Group. The Group adds to the carrying amount of an item of property and equipment the cost of replacing parts of such an item if the replacement part is expected to provide incremental future benefits to the Group. All repairs and maintenance are charged to the consolidated statement of operations during the period in which they are incurred. After assets are placed into service, depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method as follows: • Property and equipment: 3 to 5 years • Leasehold improvements: shorter of the lease term or useful life The assets’ residual values, useful lives, and depreciation methods are reviewed annually and adjusted prospectively if there is an indication of a significant change. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the consolidated statement of operations when the asset is derecognized. (n) Acquired intangible assets other than goodwill comprise acquired developed technology, trade names, and patents. At initial recognition, intangible assets acquired in a business combination are recognized at their fair value as of the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortization and impairment losses. The Group recognizes internal development costs as intangible assets only when the following criteria are met: the technical feasibility of completing the intangible asset exists, there is an intent to complete and an ability to use or sell the intangible asset, the intangible asset will generate probable future economic benefits, there are adequate resources available to complete the development and to use or sell the intangible asset, and there is the ability to reliably measure the expenditure attributable to the intangible asset during its development. Intangible assets with finite lives are typically amortized on a straight-line basis over their estimated useful lives, typically 3 to 5 years for technology and 3 to 8 years for trade names and trademarks and are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization of intangible assets is recognized in the consolidated statement of operations in the expense category consistent with the function of the intangible assets. (o) Goodwill is the excess of the consideration transferred over the net identifiable assets acquired and liabilities assumed. Goodwill is tested annually for impairment, or more regularly if certain indicators are present. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the operating segments that are expected to benefit from the synergies of the combination and represent the lowest level at which the goodwill is monitored for internal management purposes. Goodwill is evaluated for impairment by comparing the recoverable amount of the Group’s operating segments to the carrying amount of the operating segments to which the goodwill relates. If the recoverable amount is less than the carrying amount an impairment charge is determined. The recoverable amount of the operating segments is based on fair value less costs of disposal. The Group determines the fair value of the operating segments using a combination of a discounted cash flow analysis and a market-based approach. The Group believes reasonable estimates and judgments have been used in assessing the recoverable amounts. (p) Assets that are subject to depreciation or amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognized in the consolidated statement of operations consistent with the function of the assets, for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows. Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal each reporting period. (q) (i) Financial assets Initial recognition and measurement The Group’s financial assets are comprised of cash and cash equivalents, short term investments, trade and other receivables, derivative assets, long term investments, restricted cash, and other non-current assets. All financial assets are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. Purchases and sales of financial assets are recognized on the settlement date; the date that the Group receives or delivers the asset. Receivables are non-derivative financial assets, other than short term and long term investments described below, with fixed or determinable payments that are not quoted in an active market. They are included in current assets except for those with maturities greater than 12 months after the reporting period. For more information on receivables, refer to Note 16. Short term investments are primarily comprised of debt instruments carried at fair value through other comprehensive income. The securities in this category are those that are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions (therefore not recognized at amortized cost). These meet both the hold to collect and sell business model and solely payments of principal and interest contractual cash flows tests under IFRS 9 Financial Instruments Long term investments are comprised of equity instruments carried at fair value through other comprehensive income based on the irrevocable election made at initial recognition under IFRS 9 Financial Instruments Subsequent measurement After initial measurement, short term investments are measured at fair value with unrealized gains or losses recognized in other comprehensive income and credited in other reserves within equity until the investment is derecognized, at which time, the cumulative gain or loss is recognized in finance income/costs, or the investment is determined to be impaired, when the cumulative loss is reclassified from the short term investments reserve to the consolidated statement of operations in finance costs. Interest earned whilst holding the short term investments is reported as interest income using the effective interest method. Interest income and foreign exchange revaluation are recognized in the statement of operations in the same manner as all other financial assets. After initial measurement, long term investments are measured at fair value with unrealized gains or losses, including any related foreign exchange impacts, recognized in other comprehensive income and credited in other reserves within equity without recognizing fair value changes to profit and loss upon derecognition Derecognition Financial assets are derecognized when the rights to receive cash flows from the asset have expired. Impairment of financial assets The Group assesses at each reporting date whether there is any evidence that a financial asset or a group of financial assets is impaired, primarily its trade receivables and short term investments. The Group assesses impairment for its financial assets, excluding trade receivables, using the general expected credit losses model. Under this model, the Group calculates the allowance for credit losses by considering on a discounted basis, the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance on the financial asset is the sum of these probability-weighted outcomes. For the Group’s short term investments, the Group applies the low credit risk simplification as it does not believe there to be any credit risk related to these assets given the credit quality ratings required by the Group’s investment policy. At every reporting date, the Group evaluates whether a particular debt instrument is considered to have low credit risk using all supportable information. The Group’s long term investments are not assessed for impairment due to the irrevocable election made under IFRS 9 Financial Instruments The Group uses the simplified approach for measuring impairment for its trade receivables as these financial assets do not have a significant financing component as defined under IFRS 15, Revenue from Contracts with Customers (ii) Financial liabilities Initial recognition and measurement The Group’s financial liabilities are comprised of trade and other payables, lease liabilities, derivative liabilities (warrants and instruments designated for hedging), and other liabilities, including contingent consideration, Prior to April 3, 2018, financial liabilities also included Convertible Notes and contingent options. All financial liabilities except lease liabilities are recognized initially at fair value and, in the case of Convertible Notes, net of directly attributable transaction costs. The Group accounted for the Convertible Notes in accordance with IAS 39, Financial Instruments: Recognition and Measurement Financial Instruments The Group accounts for the warrants as a financial liability measured at fair value through profit or loss. In accordance with IAS 32, Financial Instruments: Presentation The group accounts for contingent consideration as a financial liability measured at fair value through profit or loss. The fair value of the contingent consideration is presented as a component of accrued expenses and other liabilities on the consolidated statement of financial position. Changes to the fair value of the contingent consideration are recorded as operating expenses within general and administrative expenses. Subsequent measurements Other financial liabilities After initial recognition, payables are subsequently measured at amortized cost using the effective interest method. The effective interest method amortization is included in finance costs in the consolidated statement of operations. Gains and losses are recognized in the consolidated statement of operations when the liabilities are derecognized. Payables are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Financial liabilities at fair value through profit or loss After initial recognition, financial liabilities at fair value through |
Critical accounting estimates a
Critical accounting estimates and judgments | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Changes In Accounting Estimates [Abstract] | |
Critical accounting estimates and judgments | 3 . The preparation of the consolidated financial statements requires management to make judgments, estimates, and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, and equity in the consolidated financial statements and the accompanying disclosures. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The areas where assumptions and estimates are significant to the consolidated financial statements are: (i) The Group measures the cost of equity-settled transactions with employees and non-employees by reference to the fair value of the equity instruments at the date at which they are granted. Prior to April 3, 2018, the fair value was estimated using a model, which required the determination of the appropriate inputs, specifically ordinary share price. Subsequent to the Group’s direct listing, ordinary share price is no longer based on significant assumptions and estimates. The assumptions and models used for estimating the fair value of share-based payment transactions are disclosed in Note 18. (ii) Prior to April 3, 2018, the fair value of the Group’s Convertible Notes, warrants, contingent options, and long term investments were estimated using valuation techniques using inputs based on management’s judgment and conditions that existed at each reporting date. On April 3, 2018, the Group derecognized the Convertible Notes and contingent options. Subsequent to December 12, 2018, the fair value of the Group’s investment in TME is based on inputs within Level 1 of the fair value hierarchy as disclosed in Note 2. The assumptions and models used for estimating the fair value of the instruments are disclosed in Note 23. (iii) The Group has fiscal loss carry-forwards. At period end, the Group investigates the possibility of recognizing deferred tax assets with regard to the loss carry-forwards. Deferred tax assets related to loss carry-forwards are recognized only in those cases where it is probable and there is convincing evidence that the Group will generate future taxable income to which the loss carry-forward can be utilized. See Note 10. (iv) In accordance with the accounting policy described in Note 2, the Group annually performs an impairment test regarding goodwill. The assumptions used for estimating fair value and assessing available headroom based on conditions that existed at the testing date are disclosed in Note 14. (v) The Group’s agreements and arrangements with rights holders for the content used on its platform are complex. Some rights holders have allowed the use of their content on the platform while negotiations of the terms and conditions are ongoing. In certain jurisdictions, rights holders have several years to claim royalties for musical composition and therefore estimates of the royalty accruals are based on available information and historical trends. The determination of royalty accruals involves significant judgements, assumptions, and estimates of the amounts to be paid. See Note 21. (vi) Management makes significant assumptions and estimates when determining the amounts to record for provision for legal contingencies. See Note 22. (vii) In business combinations, the Group allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identified assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates, assumptions, and judgments, especially with respect to intangible assets and contingent consideration. See Note 5. (viii) As most of the Group's lease agreements do not provide an implicit rate of return, the Group uses its incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. For the Group’s lease agreements that existed prior to the adoption date, the Group determined its incremental borrowing rate as of January 1, 2019. The Group's incremental borrowing rate is determined based on estimates and judgments, including the credit rating of the Group's leasing entities and a credit spread. See Note 2 and 12. |
Revenue recognition
Revenue recognition | 12 Months Ended |
Dec. 31, 2019 | |
Contract Liabilities [Abstract] | |
Revenue recognition | 4 . Revenue from contracts with customers (i) The Group discloses revenue by reportable segment and geographic area in Note 6. (ii) The Group discloses its policies for how it identifies, satisfies, and recognizes its performance obligations associated with its contracts with customers in Note 2. (iii) Contract liabilities The Group’s contract liabilities from contracts with customers consist only of deferred revenue. Deferred revenue is mainly comprised of subscription fees collected for services not yet performed and therefore the revenue has not been recognized. Revenue is recognized over time as the services are performed. As of December 31, 2019 and 2018, the Group had deferred revenue of €319 million and €258 million, respectively. The increase in deferred revenue in 2019 is a result of an increase in the number of Premium Subscribers. This balance will be recognized as revenue as the services are performed, which is generally expected to occur over a period up to a year. Revenue recognized that was included in the contract liability balance at the beginning of the years ended December 31, 2019, 2018, and 2017 is €248 million, €210 million, and €149 million respectively. |
Business combinations
Business combinations | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Business Combinations [Abstract] | |
Business combinations | 5 . The following sections describe the Group’s material acquisitions during the years ended December 31, 2019 and 2018. Anchor FM Inc. On February 14, 2019, the Group acquired Anchor FM Inc. (“Anchor”), a software company that enables users to create and distribute their own podcasts. The acquisition allows the Group to leverage Anchor’s creator-focused platform to accelerate the Group’s path to becoming the world’s leading audio platform. The total purchase consideration was €136 million, which consisted of €125 million in cash and €11 million related to the fair value of partially vested share-based payment awards replaced. The replacement of Anchor’s share-based payment awards with share-based payments awards of the Company has been measured in accordance with IFRS 2, Share-based Payment The goodwill represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including expected future synergies and technical expertise of the acquired workforce. None of the goodwill recognized is expected to be deductible for tax purposes. The goodwill was included in the Ad-Supported segment. The intangible assets acquired primarily relate to existing technology and have a useful life of 3 years. The Group valued the existing technology using the replacement cost method under the cost approach. Included in the arrangement are €20 million of equity instruments granted to certain employees that have vesting conditions contingent on continued employment and are accounted for as equity-settled share-based payment transactions. Of the value of these instruments, €11 million is included in purchase consideration as discussed above, with the remaining amount of up to €9 million to be recorded as post-combination expense over service periods of up to four years, if not forfeited by the employees. Gimlet Media Inc. On February 15, 2019, the Group acquired Gimlet Media Inc. (“Gimlet”), an independent producer of podcast content. The acquisition allows the Group to leverage Gimlet’s in-depth knowledge of original content production and podcast monetization. The total purchase consideration was €172 million, which consisted of €170 million in cash and €2 million related to the fair value of partially vested share-based payment awards replaced. The replacement of Gimlet’s share-based payment awards with share-based payments awards of the Company has been measured in accordance with IFRS 2, Share-based Payment The acquisition was accounted for under the acquisition method. Of the total purchase consideration, €148 million has been recorded to goodwill, €15 million to acquired intangible assets, €5 million to deferred tax liabilities, €3 million to cash and cash equivalents, €3 million to content assets and €8 million to other tangible net assets. The Group incurred €3 million in acquisition related costs, which were recognized as general and administrative expenses. The goodwill represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including an increase in content development capabilities, an experienced workforce, and expected future synergies. None of the goodwill recognized is expected to be deductible for tax purposes. The goodwill was included in the Ad-Supported segment. The intangible assets and the content assets were valued by the Group using the relief from royalty method and the discounted cash flow method, respectively, both under the income approach. The relief from royalty method is based on the application of a royalty rate to forecasted revenue under the trade names. The assets have useful lives ranging from 2 to 8 years. Included in the arrangement are payments that are contingent on continued employment. The payments are recognized as remuneration for post-combination services and are automatically forfeited if employment terminates. A total of up to €40 million of post-combination cash pay-outs will be recorded as compensation expense over a service period of up to four years. Cutler Media, LLC On April 1, 2019, the Group acquired Cutler Media, LLC (“Parcast”), a premier storytelling podcast studio. The acquisition allows the Group to bolster its content portfolio and utilize Parcast’s writers, producers, and researchers in the production of high-quality content. The total purchase consideration was €49 million, which consisted of €36 million in cash and €13 million related to the estimated fair value of contingent consideration. The maximum potential contingent consideration is €43 million over the next three years, which is dependent on certain user engagement targets. The fair value of the contingent consideration is presented as a component of accrued expenses and other liabilities on the consolidated statement of financial position. The contingent consideration was valued by the Group using a simulation of user engagement outcomes under the income approach. Changes to the fair value of the contingent consideration will be recorded as operating expenses within general and administrative expenses. The acquisition was accounted for under the acquisition method. Of the total purchase consideration, €46 million has been recorded to goodwill, €2 million to acquired intangible assets, and €1 million to content assets. The Group incurred €1 million in acquisition related costs, which were recognized as general and administrative expenses. The goodwill represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including an increase in content development capabilities, an experienced workforce, and expected future synergies. The goodwill recognized is expected to be deductible for tax purposes. The goodwill was included in the Ad-Supported segment. The intangibles assets and the content assets were valued by the Group using the relief from royalty method and the discounted cash flow method, respectively, both under the income approach. The relief from royalty method is based on the application of a royalty rate to forecasted revenue under the trade names. The assets have useful lives ranging from 2 to 6 years. Included in the arrangement are payments that are contingent on continued employment. The payments are recognized as remuneration for post-combination services and are automatically forfeited if employment terminates. A total of up to €10 million of post-combination cash pay-outs will be recorded as compensation expense over a service period of up to four years. Revenues and operating losses of acquired businesses for the year ended December 31, 2019 were not significant, individually or in the aggregate, to the Group’s consolidated statement of operations. |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Operating Segments [Abstract] | |
Segment information | 6 . The Group has two reportable segments: Premium and Ad-Supported. The Premium Service is a paid service in which customers can listen on-demand and offline. Revenue is generated through subscription fees. The Ad-Supported Service is free to the user. Revenue is generated primarily through the sale of advertising. Royalty costs are primarily recorded in each segment based on specific rates for each segment agreed to with rights holders. The remaining royalties that are not specifically associated to either of the segments are allocated based on user activity or the revenue recognized in each segment. The operations of businesses acquired during the year ended December 31, 2019 are included in the Ad-Supported segment. No operating segments have been aggregated to form the reportable segments. Key financial performance measures of the segments including revenue, cost of revenue, and gross profit are as follows: 2019 2018 2017 (in € millions) Premium Revenue 6,086 4,717 3,674 Cost of revenue 4,465 3,461 2,868 Gross profit 1,621 1,256 806 Ad-Supported Revenue 678 542 416 Cost of revenue 577 445 373 Gross (loss)/profit 101 97 43 Consolidated Revenue 6,764 5,259 4,090 Cost of revenue 5,042 3,906 3,241 Gross profit 1,722 1,353 849 Reconciliation of gross profit Operating expenses, finance income, and finance costs are not allocated to individual segments as these are managed on an overall group basis. The reconciliation between reportable segment gross profit to the Group’s loss before tax is as follows: 2019 2018 2017 (in € millions) Segment gross profit 1,722 1,353 849 Research and development (615 ) (493 ) (396 ) Sales and marketing (826 ) (620 ) (567 ) General and administrative (354 ) (283 ) (264 ) Finance income 275 455 118 Finance costs (333 ) (584 ) (974 ) Share in (losses)/earnings of associate — (1 ) 1 Loss before tax (131 ) (173 ) (1,233 ) Revenue by country 2019 2018 2017 (in € millions) United States 2,542 1,973 1,577 United Kingdom 727 576 444 Luxembourg 4 3 3 Other countries 3,491 2,707 2,066 6,764 5,259 4,090 Premium revenue is attributed to a country based on where the membership originates. Ad-Supported revenue is attributed to a country based on where the advertising campaign is viewed. There are no countries that individually make up greater than 10% of total revenue included in “Other countries.” Non-current assets by country Non-current assets for this purpose consists of property and equipment and lease right-of-use assets. 2019 2018 2017 (in € millions) Sweden 154 29 32 United States 525 142 28 United Kingdom 79 19 6 Other countries 22 7 7 780 197 73 As of December 31, 2019, 2018, and 2017, the Group held no property and equipment in Luxembourg. |
Personnel expenses
Personnel expenses | 12 Months Ended |
Dec. 31, 2019 | |
Classes Of Employee Benefits Expense [Abstract] | |
Personal expenses | 7 . 2019 2018 2017 (in € millions, except employee data) Wages and salaries 541 409 348 Social costs 111 90 136 Contributions to retirement plans 26 20 17 Share-based payments 122 88 65 Other employee benefits 88 60 48 888 667 614 Average full-time employees 4,405 3,651 2,960 |
Auditor remuneration
Auditor remuneration | 12 Months Ended |
Dec. 31, 2019 | |
Auditors Remuneration [Abstract] | |
Auditor remuneration | 8 . 2019 2018 2017 (in € millions) Auditor fees 5 4 5 |
Finance income and costs
Finance income and costs | 12 Months Ended |
Dec. 31, 2019 | |
Finance Income And Costs [Abstract] | |
Finance income and costs | 9 . 2019 2018 2017 (in € millions) Finance income Fair value movements on derivative liabilities (Note 23) 182 376 97 Interest income 31 25 19 Other financial income 1 11 2 Foreign exchange gains 61 43 — Total 275 455 118 Finance costs Fair value movements on derivative liabilities (Note 23) (235 ) (360 ) (303 ) Fair value movements on Convertible Notes (Note 23) — (201 ) (524 ) Interest expense on lease liabilities (38 ) — — Interest, bank fees and other costs (5 ) (6 ) (4 ) Foreign exchange losses (55 ) (17 ) (143 ) Total (333 ) (584 ) (974 ) |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Income Tax [Abstract] | |
Income tax | 10 . 2019 2018 2017 (in € millions) Current tax expense Current year 45 41 6 Changes in estimates in respect to prior year (1 ) — 1 44 41 7 Deferred tax expense/(benefit) Temporary differences 27 (123 ) (5 ) Change in recognition of deferred tax (17 ) (14 ) — Change in tax rates 1 1 — 11 (136 ) (5 ) Income tax expense/(benefit) 55 (95 ) 2 For the years ended December 31, 2019, 2018, and 2017, the Group recorded an income tax (benefit)/expense of €(31) million, €147 million, and €0 million, respectively, in other comprehensive (loss)/income related to components of other comprehensive (loss)/income. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. In 2019, the Group did not recognize current income tax expense for uncertain tax positions and have cumulatively recorded liabilities of €1 million for uncertain tax positions at December 31, 2019, of which none is reasonably expected to be resolved within twelve months. A reconciliation between the reported tax expense for the year, and the theoretical tax expense that would arise when applying the statutory tax rate in Luxembourg of 24.94%, 26.01%, and 27.08%, and on the consolidated loss before taxes for the years ended December 31, 2019, 2018, and 2017, respectively, is shown in the table below: 2019 2018 2017 (in € millions) Loss before tax (131 ) (173 ) (1,233 ) Tax using the Luxembourg tax rate (33 ) (45 ) (334 ) Effect of tax rates in foreign jurisdictions 2 (11 ) (10 ) Permanent differences 58 (7 ) 15 Change in unrecognized deferred taxes 29 (43 ) 329 Deferred tax on foreign exchange differences 1 8 — Other (2 ) 3 2 Income tax expense/(benefit) 55 (95 ) 2 In 2019 and 2018, the Group recognized deferred tax expense of €0 million and €8 million, respectively, as a result of foreign exchange differences on its investment in TME. The Group will be subject to deferred tax in future periods as a result of foreign exchange movements between USD, EUR, and SEK, primarily related to its investment in TME. The major components of deferred tax assets and liabilities are comprised of the following: 2019 2018 (in € millions) Intangible assets (42 ) (1 ) Share-based compensation 14 6 Tax losses carried forward 78 147 Property and equipment 79 5 Unrealized gains (126 ) (154 ) Other 4 3 Net tax 7 6 A reconciliation of net deferred tax is shown in the table below: 2019 2018 2017 (in € millions) At January 1 6 6 3 Movement recognized in consolidated statement of operations (11 ) 136 5 Movement recognized in consolidated statement of changes in equity and other comprehensive income 18 (136 ) 2 Movement due to acquisition (6 ) — (4 ) At December 31 7 6 6 Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Reconciliation to consolidated statement of financial position 2019 2018 (in € millions) Deferred tax assets 9 8 Deferred tax liabilities 2 2 Deferred tax assets have not been recognized in respect of the following items, because it is not probable that future taxable profit will be available against which the Group can use the benefits. 2019 2018 (in € millions) Intangible assets 77 72 Share-based compensation 58 34 Tax losses carried forward 192 148 Unrealized losses 3 2 Other 49 20 379 276 At December 31, 2019, no deferred tax liability had been recognized on investments in subsidiaries. The Company has concluded it has the ability and intention to control the timing of any distribution from its subsidiaries and will only do so in a tax advantageous manner. It is not practicable to calculate the unrecognized deferred tax liability on investments in subsidiaries. Tax loss carry-forwards as at December 31, 2019 were expected to expire as follows: Expected expiry 2020-2029 2030 and onwards Unlimited Total (in € millions) Tax loss carry-forwards — 509 996 1,505 Research and development credit carryforward — 16 — 16 Foreign tax credits 4 — — 4 The Group has significant net operating loss carry-forwards in the United States and Sweden. In certain jurisdictions, if the Group is unable to earn sufficient income or profits to utilize such carry-forwards before they expire, they will no longer be available to offset future income or profits. In Sweden, utilization of these net operating loss carry-forwards may be subject to a substantial annual limitation if there is an ownership change within the meaning of Chapter 40, paragraphs 10-14, of the Swedish Income Tax Act (the “Swedish Income Tax Act”). In general, an ownership change, as defined by the Swedish Income Tax Act results from a transaction or series of transactions over a five-year period resulting in an ownership change of more than 50% of the outstanding stock of a company by certain categories or individuals, businesses or organizations. In addition, in the United States, utilization of these net operating loss carry-forwards may be subject to a substantial annual limitation if there is an ownership change within the meaning of Section 382 of the Internal Revenue Code (“Section 382”). In general, an ownership change, as defined by Section 382, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50% of the outstanding stock of a company by certain stockholders or public groups. Since the Group formation, the Group has raised capital through the issuance of capital stock on several occasions, and the Group may continue to do so, which, combined with current or future shareholders’ disposition of ordinary shares, may have resulted in such an ownership change. Such an ownership change may limit the amount of net operating loss carry-forwards that can be utilized to offset future taxable income. The Group’s most significant tax jurisdictions are Sweden and the U.S. (both at the federal level and in various state jurisdictions). Because of its tax loss and tax credit carry-forwards, substantially all of the Group’s tax years after 2012 remain open to federal, state, and foreign tax examination. Certain of the Group’s subsidiaries are currently under examination by the Swedish, U.S. and other foreign tax authorities for tax years from 2013-2017. These examinations may lead to adjustments to the Group’s taxes. The Group has initiated and are in negotiations of an Advanced Pricing Agreement (“APA) between Sweden and the United States governments for the tax years 2014 through 2020 covering various transfer pricing matters. These transfer pricing matters may be significant to the consolidated financial statements. |
Loss per share
Loss per share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Loss per share | 11 . Basic loss per share is computed using the weighted-average number of outstanding ordinary shares during the period. Diluted loss per share is computed using the treasury stock method to the extent that the effect is dilutive by using the weighted-average number of outstanding ordinary shares and potential ordinary shares during the period. The Group’s potential ordinary shares consist of incremental shares issuable upon the assumed exercise of stock options and warrants, and the incremental shares issuable upon the assumed vesting of unvested restricted stock units, restricted stock awards, and other contingently issuable shares, excluding all anti-dilutive ordinary shares outstanding during the period. The Group used the if-converted method to calculate the dilutive impact of the warrants and adjusted the numerator for changes in profit or loss. The computation of loss per share for the respective periods is as follows: 2019 2018 2017 (in € millions, except share and per share data) Basic loss per share Net loss attributable to owners of the parent (186 ) (78 ) (1,235 ) Shares used in computation: Weighted-average ordinary shares outstanding 180,960,579 177,154,405 151,668,769 Basic net loss per share attributable to owners of the parent (1.03 ) (0.44 ) (8.14 ) Diluted loss per share Net loss attributable to owners of the parent (186 ) (78 ) (1,235 ) Fair value adjustments on warrants — (14 ) — Net loss used in the computation of diluted loss per share (186 ) (92 ) (1,235 ) Shares used in computation: Weighted-average ordinary shares outstanding 180,960,579 177,154,405 151,668,769 Warrants — 4,055,887 — Diluted weighted average ordinary shares 180,960,579 181,210,292 151,668,769 Diluted net loss per share attributable to owners of the parent (1.03 ) (0.51 ) (8.14 ) Potential dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: 2019 2018 2017 Employee options 12,153,772 12,243,526 14,646,720 Restricted stock units 638,350 100,383 195,937 Restricted stock awards 41,280 61,880 61,880 Other contingently issuable shares 162,320 — — Warrants 2,400,000 — 6,720,000 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Leases [Abstract] | |
Leases | 12. On January 1, 2019, the Group adopted IFRS 16, and all related amendments, using the modified retrospective transition method, under which the cumulative effect of initial application is recognized in accumulated deficit at January 1, 2019. The new standard requires the recognition of right-of-use assets and lease liabilities on the Group's balance sheet for operating leases, along with the net impact on transition recorded to accumulated deficit. The Group is required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use asset. The Group’s statement of operations for 2019 reflects additional depreciation expense due to the right-of use assets and an increase in finance costs for effective interest expense on its lease liabilities, partially offset by a reduction in rental expenses. There is no impact to the overall changes in cash flows. However, operating cash flows are positively impacted, while financing cash flows are negatively impacted due primarily to the classification of principal payments on lease liabilities. The comparative information for 2018 has not been restated and continues to be reported under IAS 17 and related interpretations. The primary change in accounting policies as a result of the application of IFRS 16 is explained above in Note 2. Such a change is made in accordance with the transitional provisions of IFRS 16. Definition of a lease Previously, the Group determined at contract inception whether an arrangement is or contains a lease under IAS 17 and IFRIC 4. Under IFRS 16, the Group assesses whether a contract is or contains a lease based on the definition of a lease, as explained in Note 2. The Group elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 at the date of initial application. Therefore, the definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after January 1, 2019. As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the Group. Under IFRS 16, the Group recognizes right-of-use assets and lease liabilities for most leases previously classified as operating under IAS 17. Leases classified as operating leases under IAS 17 At transition, lease liabilities were measured at the present value of the remaining lease payments, net of lease incentives receivable, that are not paid at the commencement date, discounted at the lessee’s incremental borrowing rate as at January 1, 2019. Right-of-use assets are measured at their carrying amount as if IFRS 16 had been applied since the commencement date and discounted using the lessee's incremental borrowing rate at the date of initial application. The Group used the following practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS 17. - Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term. - Excluded initial direct costs from measuring the right-of-use asset at the date of initial application. - Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease. Below is a reconciliation of lease liabilities related to lease commitments as of the date recognized due to the modified retrospective application of IFRS 16: January 1, 2019 (in € millions) Total lease commitments as of December 31, 2018 833 Impact of discounting remaining lease payments (285 ) Recognition exemption for short-term leases (7 ) Total lease liabilities included in the consolidated statement of financial position at January 1, 2019 541 Current 20 Non-current 521 Total 541 The weighted average incremental borrowing rate applied to lease liabilities recognized in the statement of financial position at the date of initial application was 6.7%. Expenses relating to short-term leases, including those excluded from the IFRS 16 transition due to the election of the practical expedient, were approximately €14 . The Group’s right of use assets are comprised of leased office space. Below is the roll-forward of lease right-of-use assets: Right of use assets (in € millions) Cost At January 1, 2019 471 Increases 138 Acquired in business combinations 11 Decreases (39 ) Exchange differences 6 At December 31, 2019 587 Accumulated depreciation At January 1, 2019 (75 ) Depreciation charge (42 ) Decreases 21 Exchange differences (2 ) At December 31, 2019 (98 ) Cost, net accumulated depreciation At January 1, 2019 396 At December 31, 2019 489 Below is the maturity analysis of lease liabilities: Lease liabilities December 31, 2019 Maturity Analysis (in € millions) Less than one year 79 One to five years 317 More than five years 589 Total lease commitments 985 Impact of discounting remaining lease payments (324 ) Lease incentives receivable (32 ) Total lease liabilities 629 Lease liabilities included in the consolidated statement of financial position Current 7 Non-current 622 Total 629 (1) Excluded from the lease commitments above are short-term leases that are not recognized under IFRS 16 based on the Group’s election of the practical expedient. Additionally, the Group has entered into certain lease agreements with approximately €19 million of commitments, which have not commenced as of December 31, 2019, and as such, have not been recognized on the consolidated statement of financial position. The weighted average incremental borrowing rate applied to lease liabilities recognized in the statement of financial position as of December 31, 2019 was 6.4%. |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Property Plant And Equipment [Abstract] | |
Property and equipment | 13 . Property and equipment Leasehold improvements Total (in € millions) Cost At January 1, 2018 105 73 178 Additions 3 142 145 Disposals (46 ) (1 ) (47 ) Exchange differences (1 ) 2 1 At December 31, 2018 61 216 277 Additions 20 106 126 Acquired in business combinations 1 5 6 Disposals (29 ) (38 ) (67 ) Exchange differences 1 6 7 At December 31, 2019 54 295 349 Accumulated depreciation At January 1, 2018 (84 ) (21 ) (105 ) Depreciation charge (12 ) (9 ) (21 ) Disposals 45 — 45 Exchange differences 1 — 1 At December 31, 2018 (50 ) (30 ) (80 ) Depreciation charge (8 ) (21 ) (29 ) Impairment charge — (6 ) (6 ) Disposals 30 28 58 Exchange differences (1 ) — (1 ) At December 31, 2019 (29 ) (29 ) (58 ) Cost, net accumulated depreciation At December 31, 2018 11 186 197 At December 31, 2019 25 266 291 For the year ended December 31, 2019, the Group recognized a €6 million impairment charge on leasehold improvements upon termination of the associated lease agreement. The Group had €15 million and €100 million of leasehold improvements that were not placed into service as of December 31, 2019 and 2018, respectively. |
Goodwill and intangible assets
Goodwill and intangible assets | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets And Goodwill [Abstract] | |
Goodwill and intangible assets | 14 . Internal development costs and patents Acquired intangible assets Total Goodwill Total (in € millions) Cost At January 1, 2018 18 17 35 135 170 Additions 8 — 8 — 8 Acquisition, business combination (Note 5) — 3 3 8 11 Exchange differences — 1 1 3 4 At December 31, 2018 26 21 47 146 193 Additions 19 — 19 — 19 Acquisition, business combination — 27 27 328 355 Exchange differences — (1 ) (1 ) 4 3 At December 31, 2019 45 47 92 478 570 Accumulated amortization At January 1, 2018 (6 ) (2 ) (8 ) — (8 ) Amortization charge (6 ) (5 ) (11 ) — (11 ) At December 31, 2018 (12 ) (7 ) (19 ) — (19 ) Amortization charge (7 ) (9 ) (16 ) — (16 ) Exchange differences — 1 1 — 1 At December 31, 2019 (19 ) (15 ) (34 ) — (34 ) Cost, net accumulated amortization At December 31, 2018 14 14 28 146 174 At December 31, 2019 26 32 58 478 536 Amortization of €14 million, €11 million and €8 million in 2019, 2018, and 2017, respectively, is included in research and development in the consolidated statement of operations. Research and development costs that are not eligible for capitalization have been expensed in the period incurred. Goodwill is tested for impairment on an annual basis or when there are indications the carrying amount may be impaired. Goodwill is allocated to the Group’s two operating segments, Premium and Ad-Supported, based on the segment that is expected to benefit from the business combination. The Group monitors goodwill at the operating segment level for internal purposes, consistent with the way it assesses performance and allocates resources. The carrying amount of goodwill allocated to each of the operating segments is as follows: Premium Ad-Supported Premium Ad-Supported 2019 2019 2018 2018 (in € millions) Goodwill 130 348 128 18 Valuation methodology The Group performed its annual impairment test in the fourth quarter of 2019. The recoverable amount of the Premium and Ad-Supported operating segments represents fair value less costs of disposal (“FVLCD”). The FVLCD is considered a level 3 fair value based on certain unobservable inputs. FVLCD is calculated using both the income and market approaches. The income approach is calculated by discounting the projected cash flows of each of the operating segments. The market valuation is calculated by applying a median multiple from comparable publicly traded companies to the average revenue of the preceding and forecast twelve months, before and after the date of the impairment test. As a result of the analysis, the FVLCD for the Premium and Ad-Supported operating segments was determined to be in excess of their carrying amounts. Key assumptions used in the FVLCD calculations at the impairment testing date In 2019, the Group weighted the income and market approaches 50% and 50%, respectively, for each of its operating segments. The key assumptions used in the income approach was the discount rate based on the weighted-average cost of capital. The discount rate was 7.5% and 9% for the Group’s premium and ad-supported segments, respectively. The key assumptions used in the market approach were the revenue multiples for comparable companies, which were selected, based on industry similarity, financial risk, and size of each of the Group’s operating segments. Revenue multiples used in the market approach ranged from 2.5 to 3.5. There are no reasonably possible changes in the key assumptions that would result in the operating segments’ carrying amounts exceeding their recoverable amounts. |
Restricted cash and other non-c
Restricted cash and other non-current assets | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Restricted Cash And Other Non Current Assets [Abstract] | |
Restricted cash and other non-current assets | 15 . 2019 2018 (in € millions) Restricted cash Lease deposits and guarantees 54 52 Other 1 3 Other non-current assets 14 10 69 65 |
Trade and other receivables
Trade and other receivables | 12 Months Ended |
Dec. 31, 2019 | |
Trade And Other Receivables [Abstract] | |
Trade and other receivables | 16 . 2019 2018 (in € millions) Trade receivables 305 286 Less: allowance for expected credit losses (5 ) (8 ) Less: provision for credit reserves (3 ) (5 ) Trade receivables – net 297 273 Other 105 127 402 400 Trade receivables are non-interest bearing and generally have 30-day payment terms. Due to their comparatively short maturities, the carrying value of trade and other receivables approximate their fair value. The aging of the Group’s net trade receivables is as follows: 2019 2018 (in € millions) Current 209 195 Overdue 1 – 30 days 51 44 Overdue 31 – 60 days 19 19 Overdue 60 – 90 days 10 7 Overdue more than 90 days 8 8 297 273 The movements in the Group’s allowance for expected credit losses are as follows: 2019 2018 (in € millions) At January 1 8 15 Provision for expected credit losses 12 15 Reversal of unutilized provisions (12 ) (18 ) Receivables written off (3 ) (4 ) At December 31 5 8 The Group maintains an allowance for expected credit losses of a portion of trade receivables based on the simplified approach for measuring expected credit losses. The Group estimates anticipated losses based on lifetime expected credit losses at each reporting date. The Group has an established provision matrix which takes into account the number of days past due, collection history, identification of specific customer exposure, product type, geographical region and current economic trends. Expected credit losses on trade receivables are calculated based on the aforementioned matrix and are charged to general and administrative expense in the consolidated statement of operations. Receivables for which an impairment provision was recognized are written off against the provision when it is deemed uncollectible. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables mentioned above. The Group does not hold any collateral as security. |
Issued Share Capital and Other
Issued Share Capital and Other Reserves | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Classes Of Share Capital [Abstract] | |
Issued share capital and other reserves | 17 . As at December 31, 2019, 2018, and 2017, the authorized and subscribed share capital was comprised of 403,032,520, 403,032,520, and 403,001,760 shares, respectively, at a par value €0.000625 each. As at December 31, 2019, 2018, and 2017, the Company had 187,492,667, 183,901,040, and 167,258,400 ordinary shares issued and fully paid, respectively. The Group has incentive stock plans under which options and restricted stock to subscribe to the Company’s share capital have been granted to executives and certain employees. Options exercised or restricted stock vesting under these plans are settled via either the issuance of new shares or issuance of shares from treasury. On November 13, 2012, the Group entered into an equity financing agreement with new and existing shareholders for the issuance of 4,204,120 ordinary shares for total gross proceeds of €79 million and incurred transaction costs of €3 million in addition to the shares received, the new investors also received contingent options that provided downside protection (meaning that the new investors are eligible to receive additional shares at certain valuations in the event of certain triggering events such as a trade sale, public listing, or liquidation). The contingent options were determined to be embedded derivatives which required separation from the equity issuance. The contingent options recognized as a derivative liability upon issuance were valued at €39 million at December 31, 2012. Upon the direct listing, the contingent options expired at no value. On November 20, 2013, the Group entered into an equity financing agreement with new investors for the issuance of 8,233,160 shares. On December 19, 2013, the first closing occurred and the Group issued 5,584,160 shares for total gross proceeds of €123 million and incurred transaction costs of €2 million. The second closing occurred on January 17, 2014, whereby 2,649,000 ordinary shares were issued for total gross proceeds of €58 million. In addition to the shares received in December 2013, the new investors also received contingent options that provided downside protection (meaning that the new investors are eligible to receive additional shares at certain valuations in the event of certain triggering events such as a trade sale, public listing, or liquidation). The contingent options were determined to be embedded derivatives, which required separation from the equity issuance. The contingent options recognized as a derivative liability upon issuance were valued at €31 million at December 31, 2013. Upon the direct listing, the contingent options expired at no value. On April 17, June 9, and July 15, 2015, the Group entered into an equity financing agreement with new and existing shareholders for the issuance of 9,484,880 ordinary shares for total gross proceeds of €479 million and incurred transaction costs of €5 million. In addition to the shares received, the new investors also received contingent options that provided downside protection (meaning that the new investors are eligible to receive additional shares at certain valuations in the event of certain triggering events such as a trade sale, public listing, or liquidation). The contingent options were determined to be embedded derivatives, which required separation from the equity issuance. The contingent options are recognized as a derivative liability and were valued at €87 million upon issuance. Upon the direct listing, the contingent options expired at no value. On October 17, 2016, the Group issued, for €27 million in cash, warrants to acquire 5,120,000 ordinary shares to certain members of key management. The exercise price of each warrant was US$50.61, which was equal to 1.2 times the fair market value of ordinary shares on the date of issuance. On October 4, 2019, the Company issued 1,600,000 ordinary shares upon the exercise of 1,600,000 of these warrants, for cash of €74 million. On October 17, 2019, the Company issued 1,991,627 shares upon the effective net settlement of the remaining 3,520,000 warrants. On July 13, 2017, the Group issued, for €9 million in cash, a warrant to acquire 1,600,000 ordinary shares to a holder that is an employee and a member of management of the Group. The exercise price of each warrant is US$89.73, which was equal to 1.3 times the fair market value of ordinary shares on the date of issuance. The warrants are exercisable at any time through July 2020. On December 15, 2017, the Group issued 8,552,440 ordinary shares in exchange for a non-controlling equity interest in TME valued at €910 million. For further details, please see Note 23. The ordinary shares issued are subject to certain transfer restrictions for a period of up to three years from December 15, 2017, subject to limited exceptions, including transfers with the Group’s prior consent; transfers to certain permitted transferees; transfers pursuant to a tender offer or exchange offer recommended by the Group’s board of directors for a majority of the Group’s issued and outstanding securities; transfers pursuant to mergers, consolidations, or other business combination transactions approved by the Group’s board of directors; transfers to the Group or any of its subsidiaries; or transfers that are necessary to avoid regulation as an “investment company” under the U.S. Investment Company Act of 1940, as amended. On December 15 and 29, 2017, the Group entered into exchange agreements with holders of a portion of its Convertible Notes, pursuant to which the Group exchanged an aggregate of US$411 million in principal of Convertible Notes, plus accrued interest of US$37 million, for an aggregate of 6,554,960 ordinary shares. In January 2018, the Group entered into an exchange agreement with holders of the remaining balance of its Convertible Notes, pursuant to which the Group exchanged the remaining of US$628 million of Convertible Notes, plus accrued interest, for 9,431,960 ordinary shares. On February 16, 2018, the Company issued 10 beneficiary certificates per ordinary share held of record to entities beneficially owned by the Group’s founders, Daniel Ek and Martin Lorentzon. The beneficiary certificates carry no economic rights and are issued to provide the holders of such beneficiary certificates with additional voting rights. The beneficiary certificates, subject to certain exceptions, are non-transferable and shall be automatically canceled for no consideration in the case of sale or transfer of the ordinary share to which they are linked. The Company may issue additional beneficiary certificates under the total authorized amount at the discretion of its Board of Directors, of which the Group’s founders are members. On March 7, 2018, the Company issued 5,740,000 ordinary shares to its Netherlands subsidiary at par value and subsequently repurchased those shares at the same price. These shares are held in treasury in order to facilitate the fulfillment of employee exercises under the Company’s ESOP and RSU plans. Similar future transactions are expected to take place to fulfill future option exercises. On April 3, 2018, the Group completed a direct listing of the Company’s ordinary shares on the NYSE. Upon the direct listing, the option for the Convertible Noteholders to unwind the January 2018 exchange transaction expired and, as a result, the Company reclassified the Convertible Notes balance of €1.1 billion to Other paid in capital within Equity. On November 5, 2018, the Company announced that it would commence a share repurchase program beginning in the fourth quarter of 2018. Repurchases of up to 10,000,000 of the Company’s ordinary shares have been authorized by the Company’s general meeting of shareholders and the Board of Directors approved such repurchase up to the amount of US$1.0 billion. The repurchase program will expire on April 21, 2021. Through December 31, 2019, there have been 4,366,427 shares repurchased for €510 million under this program. On July 1, 2019, the Group issued, for €15 million in cash, a warrant to acquire 800,000 ordinary shares to a holder that is an employee and a member of management of the Group. The exercise price of each warrant is US$190.09, which was equal to 1.3 times the fair market value of ordinary shares on the date of issuance. The warrants are exercisable at any time through July 1, 2022. No dividends were paid during the year or are proposed. All outstanding shares have equal rights to vote at general meetings. For the year ended December 31, 2019 and 2018, the Company repurchased, in total, 3,679,156 and 6,427,271 of its own ordinary shares, respectively, and reissued 3,557,405 and 3,382,312 treasury shares, respectively, upon the exercise of stock options and restricted stock units. As of December 31, 2019 and 2018, the Company had 3,166,710 and 3,044,959 ordinary shares held as treasury shares, respectively. As of December 31, 2019 and 2018 , the Group’s founders held 378,201,910 and 364,785,640 beneficiary certificates, respectively Other reserves 2019 2018 2017 (in € millions) Currency translation At January 1 (15 ) (7 ) (4 ) Currency translation 4 (6 ) (3 ) Gains reclassified to consolidated statement of operations — (2 ) — At December 31 (11 ) (15 ) (7 ) Short term investments At January 1 (4 ) (5 ) (4 ) Gains/(losses) on fair value that may be subsequently reclassified to consolidated statement of operations 7 (2 ) (2 ) Losses reclassified to consolidated statement of operations — 2 1 Deferred tax (2 ) 1 — At December 31 1 (4 ) (5 ) Long term investments At January 1 561 (11 ) — (Losses)/gains on fair value not to be subsequently reclassified to consolidated statement of operations (149 ) 720 (11 ) Deferred tax 32 (148 ) — At December 31 444 561 (11 ) Cash flow hedges At January 1 (1 ) — — (Losses)/gains on fair value that may be subsequently reclassified to consolidated statement of operations (7 ) 1 — Losses/(gains) reclassified to revenue 10 (5 ) — (Gains)/losses reclassified to cost of revenue (7 ) 3 — Deferred tax 1 — — At December 31 (4 ) (1 ) — Share-based payments At January 1 334 200 130 Share-based payments (Note 18) 127 88 67 Income tax impact associated with share-based payments (Note 10) 26 48 3 Issuance of share-based payments in conjunction with business combinations (Note 5) 13 — — Restricted stock units withheld for employee taxes (6 ) (2 ) — At December 31 494 334 200 Other reserves at December 31 924 875 177 Currency translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign operations into the reporting currency. Short term investment reserve recognizes the unrealized fair value gains and losses on debt instruments held at fair value through OCI. Long term investment reserve recognizes the unrealized fair value gains and losses on equity instruments held at fair value through OCI. Cash flow hedge reserve recognizes the unrealized gains and losses on the effective portion of foreign exchange forward contracts designated for hedging. Share-based payments reserve recognizes the grant date fair value of equity-settled awards provided to employees as part of their remuneration. For further details, please see Note 18. |
Share-based Payments
Share-based Payments | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Share Based Payments [Abstract] | |
Share-based payments | 18 . Share-based payments Employee Stock Option Plans Under the Employee Stock Option Plans (“ESOP”), stock options of the Company are granted to executives and certain employees of the Group. For options granted prior to January 1, 2016, the exercise price is equal to the fair value of the shares on grant date for employees in the United States and for U.S. citizens and fair value less 30% for the rest of the world. The value of the discount is included in the grant date fair value of the award. For options granted thereafter under these ESOP plans, the exercise price of the options is equal to the fair value of the shares on grant date for all employees. Generally, the first vesting period (13.5% – 25% of the initial grant) is up to one year from the grant date and subsequently vests at a rate of 6.25% each quarter until fully vested. The exercise price for options is payable in the EUR value of a fixed USD amount; therefore, the Group considers these awards to be USD-denominated. The options are generally granted with a term of five years. During 2019, the Company implemented a new ESOP and Director Stock Option Plan, under which stock options of the Company are granted to executives and employees of the Group and to members of the Company’s Board of Directors, respectively. For options granted under the 2019 plans, the exercise price is equal to the fair value of the ordinary shares on grant date or equal to 150% of the fair value of the ordinary shares on grant date. The exercise price is included in the grant date fair value of the award. The options granted to participants under the 2019 programs have a first vesting period of three or eight months from date of grant and vest monthly or annually thereafter until fully vested. The options are granted with a term of five years. Restricted Stock Unit Program During 2019, the Company implemented a new restricted stock unit (“RSU”) program for employees and for members of its Board of Directors. Both are accounted for as equity-settled share-based payment transactions. The RSUs are measured based on the fair market value of the underlying ordinary shares on the date of grant. The RSUs granted to participants under the 2019 programs have a first vesting period of three or eight months from date of grant and vest monthly or annually thereafter until fully vested four years from date of grant. The valuation of the RSUs was consistent with the fair value of the ordinary shares. Restricted Stock Awards and Other In connection with an acquisition during 2017, the Group issued 61,880 restricted stock awards (“RSAs”) to certain employees of the aquiree. Vesting of the RSAs is contingent on continued employment of these employees. The awards are accounted for as equity-settled share-based payment transactions. The RSAs vest over a two- and three-year period from the acquisition date. The valuation of the RSAs was consistent with the fair value of the ordinary shares. In connection with the acquisition of Anchor during the first quarter of 2019, the Company granted 162,320 equity instruments to certain employees of Anchor. Each instrument effectively represents one ordinary share of the Company, which will be issued to the holder upon vesting. The instruments vest annually over a four-year period from the acquisition date, and vesting of the instruments is contingent on continued employment. The instruments are accounted for as equity-settled share-based payment transactions and are measured based on the fair market value of the underlying ordinary shares on the date of grant. The grant date fair value of each equity instrument was US$145.21. Activity in the RSUs, RSAs, and other contingently issuable shares outstanding and related information is as follows: RSUs RSAs Other Number of RSUs Weighted average grant date fair value Number of Awards Weighted average grant date fair value Number of Awards Weighted average grant date fair value US$ US$ US$ Outstanding at January 1, 2017 501,480 36.73 — — — — Granted 80,920 59.63 61,880 90.65 — — Forfeited (85,903 ) 37.43 — — — — Released (300,560 ) 38.95 — — — — Outstanding at December 31, 2017 195,937 42.46 61,880 90.65 — — Granted 14,383 168.24 — — — — Forfeited (15,991 ) 34.93 — — — — Released (93,946 ) 40.12 — — — — Outstanding at December 31, 2018 100,383 63.87 61,880 90.65 — — Granted 715,224 137.15 — — 162,320 145.21 Forfeited (48,754 ) 118.96 — — — — Released (128,503 ) 98.52 (20,600 ) 90.65 — — Outstanding at December 31, 2019 638,350 134.79 41,280 90.65 162,320 134.15 In the table above, the number of RSUs released include ordinary shares that the Group has withheld for settlement of employees’ tax obligations due upon the vesting of RSUs. Activity in the stock options outstanding and related information is as follows: Options Number of options Weighted average exercise price US$ Outstanding at January 1, 2017 10,976,480 36.88 Granted 5,819,520 64.11 Forfeited (659,000 ) 46.34 Exercised (1,422,520 ) 22.23 Expired (67,760 ) 28.49 Outstanding at December 31, 2017 14,646,720 48.73 Granted 3,578,000 142.20 Forfeited (1,220,508 ) 62.82 Exercised (4,736,555 ) 40.97 Expired (24,131 ) 54.98 Outstanding at December 31, 2018 12,243,526 77.63 Granted 4,152,565 147.11 Forfeited (719,860 ) 105.01 Exercised (3,478,660 ) 49.41 Expired (43,799 ) 117.79 Outstanding at December 31, 2019 12,153,772 107.68 Exercisable at December 31, 2017 5,822,400 39.62 Exercisable at December 31, 2018 5,162,876 58.25 Exercisable at December 31, 2019 5,553,650 84.18 The weighted-average contractual life for the stock options outstanding at December 31, 2019, 2018, and 2017 is 2.9 years, 2.9 years, and 3.3 years, respectively. The weighted-average share price at exercise for options exercised during 2019, 2018, and 2017 was US$141.82, US$152.33, and US$57.53, respectively. The weighted-average fair value of options granted during the year ended at December 31, 2019, 2018, and 2017 was US$34.63 per option, US$39.23 per option, and US$18.05 per option, and, respectively. The stock options outstanding December 31, 2019, 2018, and 2017 are comprised of the following: 2019 2018 2017 Range of exercise prices (US$) Number of options Weighted average remaining contractual life (years) Number of options Weighted average remaining contractual life (years) Number of options Weighted average remaining contractual life (years) 1.65 to 45.00 2,130,161 0.9 4,753,052 1.8 9,039,248 2.7 45.01 to 90.00 2,482,270 2.2 3,337,414 3.2 4,736,432 4.2 90.01 to 135.00 2,946,838 3.4 2,695,890 3.9 871,040 4.2 135.01 to 180.00 3,318,423 4.1 749,360 4.3 — — 180.01 to 233.42 1,276,080 3.7 707,810 4.2 — — 12,153,772 2.9 12,243,526 2.9 14,646,720 3.3 In determining the fair value of the employee share-based awards, the Group uses the Black-Scholes option-pricing model. The Company does not anticipate paying any cash dividends in the near future and therefore uses an expected dividend yield of zero in the option valuation model. The expected volatility is based on the historical volatility of public companies that are comparable to the Group over the expected term of the award. The risk-free rate is based on U.S. Treasury zero-coupon rates as the exercise price is based on a fixed USD amount. The expected life of the stock options is based on historical data and current expectations. The following table lists the inputs to the Black-Scholes option-pricing models used for employee share-based payments for the years ended December 31, 2019, 2018, and 2017: 2019 2018 2017 Expected volatility (%) 30.1 – 35.2 32.0 – 34.7 32.0 – 43.5 Risk-free interest rate (%) 1.4 – 2.6 2.4 – 2.9 1.4 – 2.0 Expected life of stock options (years) 2.5 – 4.8 2.4 – 4.4 2.4 – 4.4 Weighted-average share price (US$) 136.09 142.20 64.11 Valuation assumptions are determined at each grant date and, as a result, are likely to change for share-based awards granted in future periods. Changes to the input assumptions could materially affect the estimated fair value of share-based payment awards. The sensitivity analysis below shows the impact of increasing and decreasing expected volatility by 10% as well as the impact of increasing and decreasing the expected life by one year. This analysis was performed on stock options granted in 2019. The following table shows the impact of these changes on stock option expense for the options granted in 2019: 2019 (in € millions) Actual stock option expense 48 Stock option expense increase (decrease) under the following assumption changes Volatility decreased by 10% (13 ) Volatility increase by 10% 13 Expected life decrease by 1 year (9 ) Expected life increase by 1 year 8 The expense recognized in the consolidated statement of operations for employee share-based payments is as follows: 2019 2018 2017 (in € millions) Cost of revenue 4 3 2 Research and development 61 40 21 Sales and marketing 27 19 15 General and administrative 30 26 27 122 88 65 |
Convertible notes and borrowing
Convertible notes and borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Convertible Notes And Borrowings [Abstract] | |
Convertible notes and borrowings | 19 . Convertible Notes On April 1, 2016, the Group issued US$1,000 million principal amount of Convertible Notes due in 2021. The notes were issued at par and bore interest of 5.0% payment-in-kind interest increasing by 100 basis points every six months after two years. Upon a specified conversion event occurring, the Convertible Notes would convert into ordinary shares at a conversion rate reflecting a conversion price equal to the lesser of a price cap per share or a discount of 20.0% to the per share price of the Company’s ordinary shares. If a specified conversion event did not occur within twelve months, the discount would increase by 250 basis points and then again, every six months thereafter until a specified conversion event did occur. A direct listing was not considered a specified conversion event. The terms also included change of control clauses where the notes holders had the option to convert into ordinary shares. At maturity, if the notes had not yet been converted or repaid, note holders would receive cash in an amount equal to the original principal amount plus 10% annualized return. The transaction costs of approximately US$20 million were effectively immediately expensed in finance costs. The Convertible Note agreements included certain affirmative covenants, including the delivery of audited consolidated financial statements to the holders. On December 15, 2017, holders of a portion of the Group’s Convertible Notes exchanged US$301 million in principal of Convertible Notes, plus accrued interest of US$27 million, for 4,800,000 ordinary shares. The Convertible Notes were recorded at fair value on the date of exchange, which was reclassified to equity upon issuance of the ordinary shares. The fair value at exchange was based on secondary market transactions of US$600 million between note holders and a third party. On December 27, 2017, the Group entered into an exchange agreement with holders of a portion of its Convertible Notes, pursuant to which the Group exchanged an aggregate of US$110 million in principal of Convertible Notes, plus accrued interest of US$10 million, for an aggregate of 1,754,960 ordinary shares as of December 29, 2017. The Convertible Notes were recorded at fair value on the date of exchange, which was reclassified to equity upon issuance of the ordinary shares. The fair value at exchange of US$211 million was based on the ordinary share fair value as at December 31, 2017. In January 2018, the Group entered into an exchange agreement with holders of the remaining balance of its Convertible Notes, pursuant to which the Group exchanged the remaining of US$628 million of Convertible Notes, plus accrued interest, for 9,431,960 ordinary shares. Pursuant to this exchange agreement, subject to certain conditions, if the Company failed to list its ordinary shares on or prior to July 2, 2018, the Group had agreed to offer to each noteholder the option to unwind the transaction such that the Group purchases back the shares that were issued to such noteholder pursuant to the exchange and would have issued such noteholder a new note that is materially identical to its note prior to the exchange. The option to unwind the exchange if a listing did not occur by July 2, 2018 met the definition of a contingent settlement event, and resulted in the issued equity shares (“Converted Notes”) being classified as a financial liability in the statement of financial position until the option to unwind expired due to a direct listing or the passage of time. On April 3, 2018, the Group completed a direct listing of the Company’s ordinary shares on the NYSE. Upon the direct listing, the option for the Convertible Noteholders to unwind the January 2018 exchange transaction expired and, as a result, the Group recorded an expense of €123 million within finance costs to mark to market the Convertible Notes to the fair value based on the closing price of the Company’s ordinary shares on April 3, 2018. The Company then reclassified the Convertible Notes balance of €1.1 billion to Other paid in capital within Equity . |
Trade and other payables
Trade and other payables | 12 Months Ended |
Dec. 31, 2019 | |
Trade And Other Payables [Abstract] | |
Trade and other payables | 20 . 2019 2018 (in € millions) Trade payables 377 295 Value added tax and sales taxes payable 148 118 Other current liabilities 24 14 549 427 Trade payables generally have a 30-day term and are recognized and carried at their invoiced value, inclusive of any value added tax that may be applicable. |
Accrued expenses and other liab
Accrued expenses and other liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Accrued Expenses And Other Liabilities [Abstract] | |
Accrued expenses and other liabilities | 21 . 2019 2018 (in € millions) Non-current Deferred rent — 85 Other accrued liabilities 20 — 20 85 Current Accrued fees to rights holders 1,153 832 Accrued salaries, vacation, and related taxes 54 41 Accrued social costs for options and RSUs 64 64 Other accrued expenses 167 139 1,438 1,076 1,458 1,161 During the year ended December 31, 2018, the Group recorded an accrual for fees to rights holders of €12 million that relates to prior years. |
Provisions
Provisions | 12 Months Ended |
Dec. 31, 2019 | |
Provisions [Abstract] | |
Provisions | 22 . Legal contingencies Other Total (in € millions) Carrying amount at January 1, 2018 53 12 65 Charged/(credited) to the consolidated statement of operations: Additional provisions — 5 5 Exchange differences 3 — 3 Utilized (17 ) (8 ) (25 ) Carrying amount at December 31, 2018 39 9 48 Charged/(credited) to the consolidated statement of operations: Additional provisions 11 5 16 Reversal of unutilized amounts — (3 ) (3 ) Exchange differences 2 — 2 Utilized (47 ) (1 ) (48 ) Carrying amount at December 31, 2019 5 10 15 As at December 31, 2018 Current portion 39 3 42 Non-current portion — 6 6 As at December 31, 2019 Current portion 5 8 13 Non-current portion — 2 2 Legal contingencies Various legal actions, proceedings, and claims are pending or may be instituted or asserted against the Group. The results of such legal proceedings are difficult to predict and the extent of the Group’s financial exposure is difficult to estimate. The Group records a provision for contingent losses when it is both probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. Between December 2015 and January 2016, two putative class action lawsuits were filed against Spotify USA Inc. in the U.S. District Court for the Central District of California, alleging that the Group unlawfully reproduced and distributed musical compositions without obtaining licenses. These cases were subsequently consolidated in May 2016 and transferred to the U.S. District Court for the Southern District of New York in October 2016, as Ferrick et al. v. Spotify USA Inc. Since July 2017, six lawsuits alleging unlawful reproduction and distribution of musical compositions have been filed against the Group in (i) the U.S. District Court for the Middle District of Tennessee ( Bluewater Music Services Corporation v. Spotify USA Inc. Gaudio et al. v. Spotify USA Inc. Robertson et al. v. Spotify USA Inc. A4V Digital, Inc. et al. v. Spotify USA Inc. Watson Music Group, LLC v. Spotify USA Inc. Wixen Music Publishing Inc. v. Spotify USA, Inc. Wixen v. Spotify Watson v. Spotify Ferrick Robertson v. Spotify Bluewater v. Spotify Gaudio v. Spotify A4V v. Spotify Other The Group has obligations under lease agreements to return the leased assets to their original condition. An obligation to return the leased asset to their original condition upon expiration of the lease is accounted for as asset retirement obligations. The obligations are expected to be settled at the end of the lease terms. The Group has indirect tax provisions which relate primarily to potential non-income tax obligations in various jurisdictions. The Group recognizes provisions for claims or indirect taxes when it determines that an unfavorable outcome is probable and the amount of loss can be reasonably estimated. These provisions are recognized as general and administrative expenses. |
Financial Risk Management and F
Financial Risk Management and Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Financial Instruments [Abstract] | |
Financial risk management and financial instruments | 23 . Financial risk management The Group’s operations are exposed to financial risks. To manage these risks efficiently, the Group has established guidelines in the form of a treasury policy that serves as a framework for the daily financial operations. The treasury policy stipulates the rules and limitations for the management of financial risks. Financial risk management is centralized within Treasury who are responsible for the management of financial risks. Treasury manages and executes the financial management activities, including monitoring the exposure of financial risks, cash management, and maintaining a liquidity reserve, and it provides certain financial services to the Group’s entities. Treasury operates within the limits and policies authorized by the Board of Directors. Capital management The Group’s objectives when managing capital (cash and cash equivalents, short term investments, equity, and, until April 2018, Convertible Notes) is to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Group’s capital structure and dividend policy is decided by the Board of Directors. Treasury continuously reviews the Group’s capital structure considering, amongst other things, market conditions, financial flexibility, business risk, and growth rate. On November 5, 2018, Spotify Technology S.A. announced that it would commence a share repurchase program beginning in the fourth quarter of 2018. Repurchases of up to 10,000,000 of the Company’s ordinary shares have been authorized by the Company’s general meeting of shareholders and the Board of Directors approved such repurchase up to the amount of US$1.0 billion. The repurchase program will expire on April 21, 2021. The timing and actual number of shares repurchased depends on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. The repurchase program is executed consistent with the Group’s capital allocation strategy of prioritizing investment to grow the business over the long term. Under the repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases, all in compliance with the rules of the Commission and other applicable legal requirements. The repurchase program does not obligate the Company to acquire any particular amount of ordinary shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. The Group uses current cash and cash equivalents and the cash flow it generates from operations to fund the share repurchase program. The Group is not subject to any externally imposed capital requirements. Credit risk management Financial assets carry an element of risk that counterparties may be unable to fulfill their obligations. This exposure arises from the investments in liquid funds of banks and other counterparties. The Group mitigates this risk by adopting a risk averse approach in relation to the investment of surplus cash. The main objectives for investments are first, to preserve principal and secondarily, to maximize return given the rules and limitations of the treasury policy. Surplus cash is invested in counterparties and instruments considered to carry low credit risk. Investments are subject to credit rating thresholds and at the time of investment, no more than 10% of surplus cash can be invested in any one issuer (excluding certain government bonds and investments in cash management banks). The weighted-average maturity of the portfolio shall not be greater than 2 years, and the final maturity of any investment is not to exceed 5 years. The Group shall maintain the ability to liquidate the majority of all short term investments within 90 days. At December 31, 2019 and 2018, the financial credit risk was equal to the consolidated statement of financial position value of cash and cash equivalents and short term investments of €1,757 million and €1,806 million, respectively. No credit losses were incurred during 2019 or 2018 on the short term investments. The credit risk with respect to the Group’s trade receivables is diversified geographically and among a large number of customers, private individuals, as well as companies in various industries, both public and private. The majority of the Group’s revenue is paid monthly in advance significantly lowering the credit risk incurred for these specific counterparties. Solvency information is generally required for credit sales within the Ad sales and Partner subscription business to minimize the risk of bad debt losses and is based on information provided by credit and business information from external sources. Liquidity risk management Liquidity risk is the Group’s risk of not being able to meet the short term payment obligations due to insufficient funds. The Group has internal control processes and contingency plans for managing liquidity risk. A centralized cash pooling process enables the Group to manage liquidity surpluses and deficits according to the actual needs at the group and subsidiary level. The liquidity management takes into account the maturities of financial assets and financial liabilities and estimates of cash flows from operations. The Group’s policy is to have a strong liquidity position in terms of available cash and cash equivalents, and short term investments. 2019 2018 (in € millions) Liquidity Short term investments 692 915 Short term deposits 585 307 Cash at bank and on hand 480 584 Total surplus liquidity 1,757 1,806 Liquidity position 1,757 1,806 Currency risk management Transaction exposure relates to business transactions denominated in foreign currency required by operations (purchasing and selling) and/or financing (interest and amortization). The Group’s general policy is to hedge a portion of its transaction exposure on a case-by-case basis under the Group’s cash-flow hedging program by entering into multiple foreign exchange forward contracts. The Group does not enter into foreign exchange forward contracts greater than one year. The Group’s currency pairs used for cash flow hedges are Euro / U.S. dollar, Euro / Australian dollar, Euro / British pound, Euro / Swedish krona, Euro / Canadian dollar, and Euro / Norwegian krone. Translation exposure relates to net investments in foreign operations. The Group does not conduct translation risk hedging. (i) Transaction exposure sensitivity In most cases, the Group’s customers are billed in their respective local currency. Major payments, such as salaries, consultancy fees, and rental fees are settled in local currencies. Royalty payments are primarily in EUR and USD. Hence, the operational need to net purchase foreign currency is due primarily to a deficit from such settlements. The table below shows the immediate impact on net loss before tax of a 10% strengthening in the closing exchange rate of significant currencies to which the Group had exposure, at December 31, 2019 and 2018. The impact on net loss is due primarily to monetary assets and liabilities in a transactional currency other than the functional currency of a subsidiary within the Group. The sensitivity associated with a 10% weakening of a particular currency would be equal and opposite. This assumes that each currency moves in isolation. 2019 SEK USD (in € millions) (Increase)/decrease in loss before tax (13 ) 121 2018 SEK USD (in € millions) (Increase)/decrease in loss before tax — 74 (ii) Translation exposure sensitivity Translation exposure exists due to the translation of the results and financial position of all of the Group entities that have a functional currency different from the presentation currency of Euro. The impact on the Group’s equity would be approximately €50 million and €12 million if the EUR weakened by 10% against all translation exposure currencies, based on the exposure at December 31, 2019 and 2018, respectively. Interest rate risk management Interest rate risk is the risk that changes in interest rates will have a negative impact on the Group’s earnings and cash flow. Prior to the Group’s direct listing, the fair value of the Group’s Convertible Notes was dependent on market interest rates, which might have negatively impacted earnings. The Convertible Notes were re-measured at each reporting date using valuation models using input data, which included market interest rates. Changes in the fair value of the Convertible Notes were recognized in finance income or cost in the consolidated statement of operations. An increase in market interest rates would have decreased the value of the Convertible Notes. The Group did not enter into any hedging arrangement to mitigate these fluctuations. The Group’s exposure to interest rate risk also is related to its interest-bearing assets, primarily its debt securities held at fair value through other comprehensive income. Fluctuations in interest rates impact the yield of the investment. The sensitivity analysis considered the historical volatility of short term interest rates and determined that it was reasonably possible that a change of 100 basis points could be experienced in the near term. A hypothetical 100 basis points increase in interest rates would have impacted interest income by €6 million and €8 million for the years ended December 31, 2019 and 2018, respectively. Financing risk management The Group finances its operations through external borrowings, equity, and cash flow from operations. The funding strategy has been to diversify funding sources. Historically, the external debt consisted of the Convertible Notes and finance leases. Share price risk management Share price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in the fair value of the Company’s ordinary share price. The Group’s exposure to this risk relates primarily to the outstanding warrants. The warrants are re-measured at each reporting date using valuation models using input data based on the Company’s share price. Changes in the fair value of these instruments are recognized in finance income or cost. An increase of share price will increase the value of the warrants. The Group has not entered into any hedging arrangement to mitigate these fluctuations. Other share price risk Social costs are payroll taxes associated with employee salaries and benefits, including share-based compensation that the Group is subject to in various countries in which the Group operates. Social costs are accrued at each reporting period based on the number of vested stock options and awards outstanding, the exercise price, and the Company's share price. Changes in the accrual are recognized in operating expenses. An increase in share price will increase the accrued expense for social costs, and when the share price decreases, the accrued expense will become a reduction in social costs expense, all other things being equal, including the number of vested stock options and exercise price remaining constant. The impact on the accrual for social costs on outstanding share based payment awards of an increase or decrease in the Company’s ordinary share price of 10% would result in a change of €14 million and €11 million at December 31, 2019 and December 31, 2018, respectively. Investment risk The Group is exposed to investment risk as it relates to changes in the market value of its long term investments, due primarily to volatility in the share price used to measure the investment and exchange rates. The majority of the Group’s long term investments relate to TME. Insurance risk management Insurance coverage is governed by corporate guidelines and includes a common package of different property and liability insurance programs. The business is responsible for assessing the risks to decide the extent of actual coverage. Treasury manages the common Group insurance programs. Financial instruments Foreign exchange forward contracts Cash flow hedges The notional principal of the foreign exchange contracts was approximately €1,538 million and €968 million as of December 31, 2019 and 2018, respectively. The following table summarizes the notional principal of the foreign currency exchange contracts by hedged line item in the statement of operations as of December 31, 2019: Notional amount in foreign currency Australian dollar (AUD) British pound (GBP) Canadian dollar (CAD) Norwegian krone (NOK) Swedish krona (SEK) U.S. dollar (USD) (in millions) Hedged line item in consolidated statement of operations Revenue 226 328 194 739 1,221 38 Cost of revenue 176 242 141 499 832 29 Total 402 570 335 1,238 2,053 67 The following table summarizes the notional principal of the foreign currency exchange contracts by hedged line item in the statement of operations as of December 31, 2018: Notional amount in foreign currency Australian dollar (AUD) British pound (GBP) Swedish krona (SEK) U.S. dollar (USD) (in millions) Hedged line item in consolidated statement of operations Revenue 187 282 1,112 27 Cost of revenue 143 202 757 21 Total 330 484 1,869 48 Non designated hedges In the first quarter of 2018, the Group effectively closed its positions in foreign exchange forward contracts not designated as hedges and recognized a gain of €8 million in finance income associated with the changes in fair value of these instruments. The Group had no such instruments outstanding as of December 31, 2019, and 2018. For the years ended December 31, 2019 and 2018, the gain associated with the changes in fair value of these instruments was €0 million and €8 million, respectively. Fair values The carrying amounts of certain financial instruments, including cash and cash equivalents, trade and other receivables, restricted cash, trade and other payables, and accrued expenses and other liabilities approximate fair value due to their relatively short maturities. The Group measures its lease liabilities as described in Note 2. All other financial assets and liabilities are accounted for at fair value. The following tables summarize, by major security type, the Group’s financial assets and liabilities that are measured at fair value on a recurring basis, and the category using the fair value hierarchy. The different levels have been defined in Note 2. Financial assets and liabilities by fair value hierarchy level Level 1 Level 2 Level 3 December 31, 2019 (in € millions) Financial assets at fair value Short term investments: Government securities 229 39 — 268 Agency securities — 5 — 5 Corporate notes — 263 — 263 Collateralized reverse purchase agreements — 156 — 156 Derivatives (designated for hedging): Foreign exchange forwards — 8 — 8 Long term investments 1,481 — 16 1,497 Total financial assets at fair value by level 1,710 471 16 2,197 Financial liabilities at fair value Derivatives (not designated for hedging): Warrants — — 98 98 Derivatives (designated for hedging): Foreign exchange forwards — 13 — 13 Contingent consideration — — 27 27 Total financial liabilities at fair value by level — 13 125 138 Financial assets and liabilities by fair value hierarchy level Level 1 Level 2 Level 3 December 31, 2018 (in € millions) Financial assets at fair value Short term investments: Government securities 164 57 — 221 Agency securities — 7 — 7 Corporate notes — 343 — 343 Collateralized reverse purchase agreements — 344 — 344 Derivatives (designated for hedging): Foreign exchange forwards — 6 — 6 Derivatives (not designated for hedging): Other — — 2 2 Long term investments 1,630 — 16 1,646 Total financial assets at fair value by level 1,794 757 18 2,569 Financial liabilities at fair value Derivatives (not designated for hedging): Warrants — — 333 333 Derivatives (designated for hedging): Foreign exchange forwards — 6 — 6 Total financial liabilities at fair value by level — 6 333 339 The Group’s policy is to recognize transfers into and transfers out of fair value hierarchy levels at the end of each reporting period. During the years ended December 31, 2019 and 2018 there were no transfers between levels in the fair value hierarchy other than the Group’s long term investment in TME, as noted below. Recurring fair value measurements Long term investment – Tencent Music Entertainment Group The Group’s approximate 8% investment in TME is carried at fair value through other comprehensive income. Prior to December 12, 2018, the fair value of unquoted ordinary shares of TME had been estimated using unquoted TME market transactions, the latest fair value per ordinary share disclosed within TME’s initial registration statement on Form F-1 filed with the SEC and other unobservable inputs. Subsequent to December 12, 2018, the fair value of ordinary shares of TME is based on the ending NYSE American depository share price. Accordingly, the entire balance of the Group’s investment in TME of €1,630 million was transferred from level 3 to level 1 within the fair value hierarchy in accordance with IFRS 7. The fair value of the long term investments may vary over time and is subject to a variety of risks including: company performance, macro-economic, regulatory, industry, USD to Euro exchange rate and systemic risks of the equity markets overall. The table below presents the changes in the investment in TME: 2019 2018 2017 (in € millions) At January 1 1,630 910 — Equity issued in exchange for long term investment — — 910 Changes in fair value recorded in other comprehensive loss (149 ) 720 — At December 31 1,481 1,630 910 The impact on the fair value of the Group’s long term investment in TME using reasonably possible alternative assumptions with an increase or a decrease of TME’s share price used to value its equity interests of 10% results in a range of €1,333 million to €1,629 million at December 31, 2019 and €1,467 million to €1,793 million at December 31, 2018. The following sections describe the valuation methodologies the Group uses to measure its Level 3 financial instruments at fair value on a recurring basis. Fair value of ordinary shares On April 3, 2018, the Group completed a direct listing of the Company’s ordinary shares on the NYSE. The fair value of the Company’s ordinary shares subsequent to the direct listing is based on the NYSE closing ordinary share price of the Group. The valuation of certain items in the consolidated financial statements prior to the direct listing was consistent with the Group’s use of the Probability Weighted Expected Return Method (“PWERM”) to value the Company’s ordinary shares. The fair value of the ordinary shares prior to the direct listing was determined using recent secondary market transactions in the Company’s ordinary shares and the PWERM, which is one of the recommended valuation methods to measure fair value in privately held companies with complex equity structures in the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation The following weightings, up until the Group’s direct listing, were applied to each valuation method: 2018 2017 PWERM 50% 50 – 80% Secondary market transactions 50% 20 – 50% The PWERM valuations, up until the Group’s direct listing, weighted the different scenarios as follows: 2018 2017 Market Approach – High Case Public Company 55 – 70% 25 – 40% Market Approach – Low Case Public Company 28 – 35% 35% Market Approach – High Case Transaction 0 – 3% 4 – 6% Market Approach – Low Case Transaction 0 – 2% 4 – 6% Private Case – Income and Market Approaches 2 – 5% 5 – 30% The key assumptions used to estimate the fair value of the ordinary shares and contingent options using the PWERM, up until the Group’s direct listing, were as follows: 2018 2017 Revenue multiple used to estimate enterprise value 3.0 2.2 – 4.6 Discount rate (%) 13.0 13.0 – 19.5 Volatility (%) 32.5 – 35.0 30.0 – 37.5 Warrants On October 17, 2016, the Company sold, for €27 million, warrants to acquire 5,120,000 ordinary shares to certain holders that are employees and management of the Group. The exercise price of each warrant is US$50.61, which was equal to 1.2 times the fair market value of ordinary shares on the date of issuance. On July 13, 2017, the Company sold, for €9 million, a warrant to acquire 1,600,000 ordinary shares to certain holders that are employees and management of the Group. The exercise price of each warrant is US$89.73, which was equal to 1.3 times the fair market value of ordinary shares on date of issuance. The warrants are exercisable at any time through July 2020. On July 1, 2019, the Company sold, for €15 million, warrants to acquire 800,000 ordinary shares to Mr. Ek, through D.G.E. Investments Limited, an entity indirectly wholly owned by him. The exercise price of each warrant is US$190.09, which was equal to 1.3 times the fair market value of ordinary shares on the date of issuance. The warrants are exercisable at any time through July 1, 2022. On October 4, 2019, the Company issued 1,600,000 ordinary shares upon the exercise of 1,600,000 warrants that were granted on October 17, 2016, for cash of €74 million. On October 17, 2019, the Company issued 1,991,627 shares upon the effective net settlement of the remaining 3,520,000 warrants that were granted on October 17, 2016. Refer to Note 25. The outstanding warrants are measured on a recurring basis in the consolidated statement of financial position and are Level 3 financial instruments recognized at fair value through the consolidated statement of operations. The warrants are valued using a Black-Scholes option-pricing model, which includes inputs determined from models that include the value of the Company’s ordinary shares, as determined above and additional assumptions used to estimate the fair value of the warrants in the option pricing model as follows: 2019 2018 2017 Expected term (years) 0.5 – 2.5 0.8 – 1.5 0.9 – 1.1 Risk free rate (%) 1.58 – 1.59 2.55 – 2.58 1.71 – 1.76 Volatility (%) 32.5 40.0 30.0 Share price (US$) 149.55 113.50 120.50 The table below presents the changes in the warrants liability: 2019 2018 2017 (in € millions) At January 1 333 346 34 Issuance of warrant for cash 15 — 9 Issuance of shares upon exercise of, or net settlement of, warrants (303 ) — — Non cash changes recognized in profit or loss Changes in fair value 35 (39 ) 313 Effect of changes in foreign exchange rates 18 26 (10 ) At December 31 98 333 346 The warrant liability is included in derivative liabilities on the consolidated statement of financial position. The change in estimated fair value is recognized within finance income or costs in the consolidated statement of operations. The impact on the fair value of the warrants with an increase or decrease in the Company’s ordinary share price of 10% results in a range of €75 million to €127 million at December 31, 2019 and €273 million to €399 million at December 31, 2018. Contingent consideration On April 1, 2019, the Group acquired Parcast, a premier storytelling podcast studio. A contingent consideration was included in the purchase consideration of the acquisition. Included in the purchase price was €13 million related to the estimated fair value of contingent consideration. The contingent consideration is valued by the Group using a simulation of user engagement outcomes. The maximum potential contingent consideration payout is €43 million over the next three years. The c hange in the fair value of the contingent consideration is recognized within general and administrative expenses in the consolidated statement of operations. The table below presents the changes in the contingent consideration liability: 2019 (in € millions) At January 1 — Initial recognition of contingent consideration included in purchase consideration of acquisition 13 Non cash changes recognized in profit or loss Changes in fair value 14 At December 31 27 Convertible Notes On April 3, 2018, the Group completed a direct listing of the Company’s ordinary shares on the NYSE, and the option for the Convertible Noteholders to unwind the January 2018 exchange transaction expired. As a result, the Group recorded an expense of €123 million within finance costs to mark to market the Convertible Notes to the fair value based on the closing price of the The table below presents the changes in the Convertible Notes: 2018 2017 (in € millions) At January 1 944 1,106 Non cash changes recognized in profit or loss Changes in fair value 221 666 Effect of changes in foreign exchange rates (20 ) (142 ) Issuance of shares upon exchange of Convertible Notes (1,145 ) (686 ) At December 31 — 944 The change in estimated fair value is recognized within finance costs in the consolidated statement of operations. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies [Abstract] | |
Commitments and contingencies | 24 . Obligations under leases On January 1, 2019, the Group recognized right-of-use assets for non-cancellable operating lease arrangements, except for short-term leases excluded from the IFRS 16 transition due to the election of the practical expedient. Refer to Note 12. The future minimum lease payments under non-cancellable operating leases, prior to the adoption of IFRS 16, as at December 31, were as follows: 2018 2017 Not later than one year 62 47 Later than one year but not more than 5 years 288 244 More than 5 years 483 478 833 769 Total lease expenses were €79 million and €52 million for the years ended December 31, 2018 and 2017, respectively. Commitments The Group is subject to the following minimum guarantees relating to the content on its service, the majority of which relate to minimum royalty payments associated with its license agreements for the use of licensed content, as at December 31: 2019 2018 2017 (in € millions) Not later than one year 657 548 1,060 Later than one year but not more than 5 years 383 152 635 1,040 700 1,695 In addition to the minimum guarantees listed above, the Group is subject to various non-cancelable purchase obligations and service agreements with minimum spend commitments of €200 million over the next 2 years, the majority of which relate to a service agreement with Google for the use of Google Cloud Platform. Contingencies Various legal actions, proceedings, and claims are pending or may be instituted or asserted against the Group. These may include but are not limited to matters arising out of alleged infringement of intellectual property; alleged violations of consumer regulations; employment-related matters; and disputes arising out of supplier and other contractual relationships. As a general matter, the music and other content made available on the Group’s service are licensed to the Group by various third parties. Many of these licenses allow rights holders to audit the Group’s royalty payments, and any such audit could result in disputes over whether the Group has paid the proper royalties. If such a dispute were to occur, the Group could be required to pay additional royalties, and the amounts involved could be material. The Group expenses legal fees as incurred. The Group records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Group’s operations or its financial position, liquidity, or results of operations. On February 25, 2019, Warner/Chappell Music Limited (“WCM”) filed a lawsuit against the Group in the High Court of Bombay, India, alleging that the Group sought to exploit WCM’s copyrights in musical compositions in India without obtaining a license. On January 13, 2020, WCM and the Group resolved the dispute, and on January 14, 2020, the High Court of Bombay, India, disposed of the lawsuit. On April 22, 2019, Saregama India Limited filed a lawsuit against the Group in the High Court of Delhi, India, alleging copyright infringement, and has sought injunctive relief. Any unfavorable outcome could harm the Group’s business in India. The Group intends to vigorously defend this action. As of April 2019, the Group’s settlement of the Ferrick et al. v. Spotify USA Inc. Eight Mile Style, LLC et al v. Spotify USA Inc. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related party transactions | 25 . Key management compensation Key management includes members of the Company’s senior management and the board of directors. The compensation paid or payable to key management for Board and employee services includes their participation in share-based compensation arrangements. The disclosure amounts are based on the expense recognized in the consolidated statement of operations in the respective year. 2019 2018 2017 (in € millions) Key management compensation Short term employee benefits 5 4 4 Share-based payments 22 19 17 Termination benefits — 1 1 27 24 22 On July 1, 2019, the Company issued, for €15 million, warrants to acquire 800,000 ordinary shares to Mr. Ek, through D.G.E. Investments Limited, an entity indirectly wholly owned by him. The exercise price of each warrant is US$190.09, which was equal to 1.3 times the fair market value of ordinary shares on the date of issuance. The warrants are exercisable at any time through July 1, 2022. On October 4, 2019, the Company issued 1,600,000 ordinary shares and 16,000,000 beneficiary certificates to Mr. Ek, through D.G.E. Investments Limited, upon the exercise of 1,600,000 warrants that were granted on October 17, 2016, for cash of €74 million. On October 17, 2019, the Company issued 905,285 ordinary shares and 9,052,850 beneficiary certificates to Mr. Ek, through D.G.E. Investments Limited, upon the effective net settlement of the remaining 1,600,000 warrants that were granted on October 17, 2016. On October 17, 2019, the Company issued 1,086,342 ordinary shares and 10,863,420 beneficiary certificates to Martin Lorentzon, a member of the Board of Directors of the Company, through Rosello Company Limited, an entity indirectly wholly owned by him, upon the effective net settlement of 1,920,000 warrants that were granted on October 17, 2016. |
Group information
Group information | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Significant Investments In Subsidiaries [Abstract] | |
Group information | 26 . The Company’s principal subsidiaries as at December 31, 2019 are as follows: Name Principal activities Proportion of voting rights and shares held (directly or indirectly) Country of incorporation Spotify AB Main operating company 100 % Sweden Spotify USA Inc. USA operating company 100 % USA Spotify Ltd Sales, marketing, contract research and development, and customer support 100 % UK Spotify Norway AS Sales and marketing 100 % Norway Spotify Spain S.L. Sales and marketing 100 % Spain Spotify GmbH Sales and marketing 100 % Germany Spotify France SAS Sales and marketing 100 % France Spotify Netherlands B.V. Sales and marketing 100 % Netherlands Spotify Canada Inc. Sales and marketing 100 % Canada Spotify Australia Pty Ltd Sales and marketing 100 % Australia Spotify Brasil Serviços De Música LTDA Sales and marketing 100 % Brazil Spotify Japan K.K Sales and marketing 100 % Japan Spotify India LLP Sales and marketing 100 % India Spotify Singapore Pte Ltd. Marketing 100 % Singapore There are no restrictions on the net assets of the Group companies. |
Events after the reporting peri
Events after the reporting period | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Events After Reporting Period [Abstract] | |
Events after the reporting period | 27 . Subsequent to year-end, the Group entered into an agreement to acquire Bill Simmons Media Group, LLC. for cash consideration totaling approximately Subsequent to year-end, the Group signed license agreements with certain music labels and publishers and podcast agreements with creators. Included in these agreements are minimum guarantee and spend commitments of approximately €186 million over the next three years. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Summary Of Significant Accounting Policies [Abstract] | |
Basis of preparation | (a) The consolidated financial statements of Spotify Technology S.A. comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and have been prepared on a historical cost basis, except for securities, long term investments, convertible senior notes (“Convertible Notes”), derivative financial instruments, and contingent consideration, which have been measured at fair value, and lease liabilities, which are measured at present value. The preparation of the consolidated financial statements in conformity with IFRS requires the application of certain critical accounting estimates and assumptions. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas involving a greater degree of judgment or complexity, or areas in which assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 3. The consolidated financial statements provide comparative information in respect of the previous periods. On January 1, 2019, the Group adopted IFRS 16, Leases See Note 12 for further information on comparability following the adoption . |
Basis of consolidation | (b) Basis of consolidation Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. |
Foreign currency translation | (c) Foreign currency translation Functional and reporting currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Euro, which is the Group’s reporting currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in the consolidated statement of operations within finance income or finance costs. Group companies The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into Euro as follows: • Assets and liabilities are translated at the closing rate at the reporting date; • Income and expenses for each statement of operation are translated at average exchange rates; and • All resulting exchange differences are recognized in other comprehensive income/(loss). Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the operation and translated at the closing rate at each reporting date. |
Revenue recognition | (d) Premium revenue The Group generates subscription revenue from the sale of the Premium Service in which customers can listen on-demand and offline. Premium Services are sold directly to end users and through partners who are generally telecommunications companies that bundle the subscription with their own services or collect payment for the stand-alone subscriptions from their end customers. The Group satisfies its performance obligation, and revenue from these services is recognized, on a straight-line basis over the subscription period. Typically, Premium Services are paid for monthly in advance. Premium partner subscription revenue is based on a per-subscriber rate in a negotiated partner agreement. Under these arrangements, a premium partner may bundle the Premium Service with its existing product offerings or offer the Premium Service as an add-on. Payment is remitted to the Group through the premium partner. The Group assesses the facts and circumstances, including whether the partner is acting as a principal or agent, of all partner revenue arrangements and then recognizes revenues either gross or net. Premium partner services, whether recognized gross or net, have one material performance obligation, that being the delivery of the Premium Service. Additionally, the Group bundles the Premium Service with third-party services and products. In bundle arrangements where the Group has multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative stand-alone selling price. The Group generally determines stand-alone selling prices based on the prices charged to customers. For each performance obligation within the bundle, revenue is recognized either on a straight-line basis over the subscription period or at a point in time when control of the service or product is transferred to the customer. Ad-Supported revenue The Group’s advertising revenue is primarily generated through display, audio, and video advertising delivered through advertising impressions and podcast downloads. The Group enters into arrangements with advertising agencies that purchase advertising on its platform on behalf of the agencies’ clients. These advertising arrangements are typically sold on a cost-per-thousand basis and are evidenced by an Insertion Order (“IO”) that specifies the terms of the arrangement such as the type of ad product, pricing, insertion dates, and number of impressions in a stated period. Revenue is recognized over time based on the number of impressions delivered. The Group also may offer cash rebates to advertising agencies based on the volume of advertising inventory purchased. These rebates are estimated based on expected performance and historical data and result in a reduction of revenue recognized. Additionally, the Group generates Ad-Supported revenue through arrangements with certain advertising exchange platforms to distribute advertising inventory for purchase on a cost-per-thousand basis through their automated exchange. Revenue is recognized over time when impressions are delivered on the platform. |
Advertising credits | (e) Advertising credits that are not transferable are issued to certain rights holders and allow them to include advertisement on the Ad-Supported Service that promote their artists and the Spotify service, such as the availability of a new single or album on Spotify. These are issued in conjunction with the Group’s royalty arrangements for nil consideration. There is no revenue recognized as the advertising credits are mutually beneficial to both the rights holders and the Group and do not meet the definition of a revenue contract under IFRS 15, Revenue from Contracts with Customers. |
Business combinations | (f) Business combinations are accounted for using the acquisition method. Identifiable assets acquired and liabilities assumed are measured initially at their fair values at the acquisition date. The excess of the consideration transferred, and the acquisition-date fair value of any previous equity interest in the acquiree, over the fair value of the identifiable net assets acquired is recognized as goodwill. In some business combinations, the Group will replace awards held by the employees of the acquiree with its share-based payment awards, whereby the vesting of the Group’s replacement awards is contingent on continued employment with the Group. Replacements of share-based payment awards are accounted for as modifications of the acquiree’s existing share-based payment awards. The value of the replaced acquiree award at acquisition date that relates to pre-combination service is accounted for as part of the consideration transferred. The excess of the value of the Group’s replacement award over the amount attributed to pre-combination services is recognized in the consolidated statement of operations, together with a corresponding credit to other reserves in equity, over the period in which the service conditions are fulfilled. Acquisition-related costs, other than those incurred for the issuance of debt or equity instruments, are charged to the consolidated statement of operations as they are incurred. |
Cost of revenue | (g) Cost of revenue consists predominantly of royalty and distribution costs related to content streaming. The Group incurs royalty costs paid to certain music record labels, music publishers, and other rights holders for the right to stream music to the Group’s users. Royalties are typically calculated using negotiated rates in accordance with license agreements and are based on either subscription and advertising revenue earned, user/usage measures, or a combination of these. The determination of the amount of the rights holders’ liability is complex and subject to a number of variables, including the revenue recognized, the type of content streamed and the country in which it is streamed, the product tier such content is streamed on, identification of the appropriate license holder, size of user base, ratio of Ad-Supported Users to Premium Subscribers, and any applicable advertising fees and discounts, among other variables. Some rights holders have allowed the use of their content on the platform while negotiations of the terms and conditions are ongoing. In such situations, royalties are calculated using estimated rates. In certain jurisdictions, rights holders have several years to claim royalties for musical compositions and therefore estimates of the royalties payable are made until payments are made. The Group has certain arrangements whereby royalty costs are paid in advance or are subject to minimum guaranteed amounts. An accrual is established when actual royalty costs to be incurred during a contractual period are expected to fall short of the minimum guaranteed amounts. For minimum guarantee arrangements, for which the Group cannot reliably predict the underlying expense, the Group will expense the minimum guarantee on a straight-line basis over the term of the arrangement. The Group also has certain royalty arrangements where the Group would have to make additional payments if the royalty rates were below those paid to other similar licensors (most favored nation clauses). For rights holders with this clause, a comparison is done of royalties incurred to date plus estimated royalties payable for the remainder of the period to estimates of the royalties payables to other appropriate rights holders, and the shortfall, if any, is recognized on a straight-line basis over the period of the applicable most favored nation clause. An accrual and expense is recognized when it is probable that the Group will make additional royalty payments under these terms. The expense related to these accruals is recognized in cost of revenue. Cost of revenue also includes credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as amounts incurred to produce content for the service. Direct costs incurred to acquire or develop podcasts are recognized as current assets. Cost of revenue includes the consumption of these assets over their useful economic life, which starts at the release of each episode. In most cases, consumption is on an accelerated basis. |
Research and development expenses | (h) Research and development expenses are primarily comprised of costs incurred for development of products related to the Group’s platform and service, as well as new advertising products and improvements to the Group’s mobile app, desktop, and streaming services. The costs incurred include related employee compensation and benefits, facility costs, IT costs and consulting costs. |
Sales and marketing expenses | (i) Sales and marketing expenses are primarily comprised of employee compensation and benefits, public relations, branding, consulting expenses, customer acquisition costs, advertising, live events and trade shows, amortization of trade name intangible assets, the cost of working with record labels and artists to promote the availability of new releases on the Group’s platform, and the costs of providing free trials of the Premium Service. Expenses included in the costs of providing free trials are primarily derived from per user royalty fees determined in accordance with the rights holder agreements. |
General and administrative expenses | (j) General and administrative expenses are comprised primarily of employee compensation and benefits for functions such as finance, accounting, analytics, legal, human resources, consulting fees, and other costs including facility and equipment costs, officers’ liability insurance, director fees, and fair value adjustments on contingent consideration. |
Income tax | (k) The tax expense for the period comprises current and deferred tax. Tax is recognized in the consolidated statement of operations except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income. (i) Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. (ii) Deferred tax Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for: • Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; • Temporary differences related to investments in subsidiaries, and associates to the extent that the Group is able to control the timing of the reversal of the temporary differences, and it is probable that they will not reverse in the foreseeable future; and • Taxable temporary differences arising on the initial recognition of goodwill. Deferred tax assets are recognized for unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available, against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if certain criteria are met. (iii) Uncertain tax positions In determining the amount of current and deferred income tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes, interest or penalties may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Group to change its judgment regarding the adequacy of existing tax liabilities. Such changes to tax liabilities will impact tax expense in the period that such a determination is made. |
Leases | (l) Policy applicable before January 1, 2019 At inception of an arrangement, the Group determines whether the arrangement is or contains a lease. The Group leases certain items of property and equipment. Leases in which substantially all the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated statement of operations on a straight-line basis over the period of the leases. Leases of property and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease’s commencement at lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the repayment of the liability and finance charges. The corresponding lease obligations, net of finance charges, are included in borrowings. The interest element of the finance cost is charged to the consolidated statement of operations over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term. Policy applicable from January 1, 2019 At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: - The contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; - The Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and - The Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. As a Lessee The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received prior to the commencement date. Any costs related to the removal and restoration of leasehold improvements, which meet the definition of property, plant and equipment under IAS 16 Property Plant and Equipment The lease term is determined based on the non-cancellable period for which the Group has the right to use an underlying asset. The lease term is adjusted, if applicable, for periods covered by extension and termination options to the extent that the Group is reasonably certain to exercise them. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, which is considered the appropriate useful life of these assets. In addition, the right-of-use asset is reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability, to the extent necessary. The lease liability is initially measured at the present value of the lease payments, net of lease incentives receivable, that are not paid at the commencement date, discounted using an incremental borrowing rate if the rate implicit in the lease arrangement is not readily determinable. Lease payments included in the measurement of the lease liability comprise fixed payments, including in-substance fixed payments and variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date. The lease liability is subsequently increased to reflect accretion of interest and reduced for lease payments made The Group leases certain properties under non-cancellable lease agreements that relate to office space. The expected lease terms are between one and fifteen years. The Group does not currently act in the capacity of a lessor. Short-term leases and lease of low-value assets The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets, including certain IT Equipment. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term. |
Property and equipment | (m) Property and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes any expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the Group. The Group adds to the carrying amount of an item of property and equipment the cost of replacing parts of such an item if the replacement part is expected to provide incremental future benefits to the Group. All repairs and maintenance are charged to the consolidated statement of operations during the period in which they are incurred. After assets are placed into service, depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method as follows: • Property and equipment: 3 to 5 years • Leasehold improvements: shorter of the lease term or useful life The assets’ residual values, useful lives, and depreciation methods are reviewed annually and adjusted prospectively if there is an indication of a significant change. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the consolidated statement of operations when the asset is derecognized. |
Intangible assets | (n) Acquired intangible assets other than goodwill comprise acquired developed technology, trade names, and patents. At initial recognition, intangible assets acquired in a business combination are recognized at their fair value as of the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortization and impairment losses. The Group recognizes internal development costs as intangible assets only when the following criteria are met: the technical feasibility of completing the intangible asset exists, there is an intent to complete and an ability to use or sell the intangible asset, the intangible asset will generate probable future economic benefits, there are adequate resources available to complete the development and to use or sell the intangible asset, and there is the ability to reliably measure the expenditure attributable to the intangible asset during its development. Intangible assets with finite lives are typically amortized on a straight-line basis over their estimated useful lives, typically 3 to 5 years for technology and 3 to 8 years for trade names and trademarks and are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization of intangible assets is recognized in the consolidated statement of operations in the expense category consistent with the function of the intangible assets. |
Goodwill | (o) Goodwill is the excess of the consideration transferred over the net identifiable assets acquired and liabilities assumed. Goodwill is tested annually for impairment, or more regularly if certain indicators are present. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the operating segments that are expected to benefit from the synergies of the combination and represent the lowest level at which the goodwill is monitored for internal management purposes. Goodwill is evaluated for impairment by comparing the recoverable amount of the Group’s operating segments to the carrying amount of the operating segments to which the goodwill relates. If the recoverable amount is less than the carrying amount an impairment charge is determined. The recoverable amount of the operating segments is based on fair value less costs of disposal. The Group determines the fair value of the operating segments using a combination of a discounted cash flow analysis and a market-based approach. The Group believes reasonable estimates and judgments have been used in assessing the recoverable amounts. |
Impairment of non-financial assets | (p) Assets that are subject to depreciation or amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognized in the consolidated statement of operations consistent with the function of the assets, for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows. Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal each reporting period. |
Financial instruments | (q) (i) Financial assets Initial recognition and measurement The Group’s financial assets are comprised of cash and cash equivalents, short term investments, trade and other receivables, derivative assets, long term investments, restricted cash, and other non-current assets. All financial assets are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. Purchases and sales of financial assets are recognized on the settlement date; the date that the Group receives or delivers the asset. Receivables are non-derivative financial assets, other than short term and long term investments described below, with fixed or determinable payments that are not quoted in an active market. They are included in current assets except for those with maturities greater than 12 months after the reporting period. For more information on receivables, refer to Note 16. Short term investments are primarily comprised of debt instruments carried at fair value through other comprehensive income. The securities in this category are those that are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions (therefore not recognized at amortized cost). These meet both the hold to collect and sell business model and solely payments of principal and interest contractual cash flows tests under IFRS 9 Financial Instruments Long term investments are comprised of equity instruments carried at fair value through other comprehensive income based on the irrevocable election made at initial recognition under IFRS 9 Financial Instruments Subsequent measurement After initial measurement, short term investments are measured at fair value with unrealized gains or losses recognized in other comprehensive income and credited in other reserves within equity until the investment is derecognized, at which time, the cumulative gain or loss is recognized in finance income/costs, or the investment is determined to be impaired, when the cumulative loss is reclassified from the short term investments reserve to the consolidated statement of operations in finance costs. Interest earned whilst holding the short term investments is reported as interest income using the effective interest method. Interest income and foreign exchange revaluation are recognized in the statement of operations in the same manner as all other financial assets. After initial measurement, long term investments are measured at fair value with unrealized gains or losses, including any related foreign exchange impacts, recognized in other comprehensive income and credited in other reserves within equity without recognizing fair value changes to profit and loss upon derecognition Derecognition Financial assets are derecognized when the rights to receive cash flows from the asset have expired. Impairment of financial assets The Group assesses at each reporting date whether there is any evidence that a financial asset or a group of financial assets is impaired, primarily its trade receivables and short term investments. The Group assesses impairment for its financial assets, excluding trade receivables, using the general expected credit losses model. Under this model, the Group calculates the allowance for credit losses by considering on a discounted basis, the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance on the financial asset is the sum of these probability-weighted outcomes. For the Group’s short term investments, the Group applies the low credit risk simplification as it does not believe there to be any credit risk related to these assets given the credit quality ratings required by the Group’s investment policy. At every reporting date, the Group evaluates whether a particular debt instrument is considered to have low credit risk using all supportable information. The Group’s long term investments are not assessed for impairment due to the irrevocable election made under IFRS 9 Financial Instruments The Group uses the simplified approach for measuring impairment for its trade receivables as these financial assets do not have a significant financing component as defined under IFRS 15, Revenue from Contracts with Customers (ii) Financial liabilities Initial recognition and measurement The Group’s financial liabilities are comprised of trade and other payables, lease liabilities, derivative liabilities (warrants and instruments designated for hedging), and other liabilities, including contingent consideration, Prior to April 3, 2018, financial liabilities also included Convertible Notes and contingent options. All financial liabilities except lease liabilities are recognized initially at fair value and, in the case of Convertible Notes, net of directly attributable transaction costs. The Group accounted for the Convertible Notes in accordance with IAS 39, Financial Instruments: Recognition and Measurement Financial Instruments The Group accounts for the warrants as a financial liability measured at fair value through profit or loss. In accordance with IAS 32, Financial Instruments: Presentation The group accounts for contingent consideration as a financial liability measured at fair value through profit or loss. The fair value of the contingent consideration is presented as a component of accrued expenses and other liabilities on the consolidated statement of financial position. Changes to the fair value of the contingent consideration are recorded as operating expenses within general and administrative expenses. Subsequent measurements Other financial liabilities After initial recognition, payables are subsequently measured at amortized cost using the effective interest method. The effective interest method amortization is included in finance costs in the consolidated statement of operations. Gains and losses are recognized in the consolidated statement of operations when the liabilities are derecognized. Payables are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Financial liabilities at fair value through profit or loss After initial recognition, financial liabilities at fair value through the profit or loss are subsequently re-measured at fair value at the end of each reporting period with changes in fair value recognized in finance income or finance costs in the consolidated statement of operations. Derecognition Financial liabilities are derecognized when the obligation under the liability is discharged, cancelled, or expires. (iii) Fair value measurements For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price the Group would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Group’s market assumptions. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, are described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities; • Level 2: other techniques for which inputs are based on quoted prices for identical or similar instruments in markets that are not active, quoted prices for similar instruments in active markets, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the asset or liability; • Level 3: techniques which use inputs that have a significant effect on the recognized fair value that require the Group to use its own assumptions about market participant assumptions. The Group maintains policies and procedures to determine the fair value of financial assets and liabilities using what it considers to be the most relevant and reliable market participant data available. It is the Group’s policy to maximize the use of observable inputs in the measurement of its Level 3 fair value measurements. To the extent observable inputs are not available, the Group utilizes unobservable inputs based upon the assumptions market participants would use in valuing the asset or liability. In determining the fair value of financial assets and liabilities employing Level 3 inputs, the Group considers such factors as the current interest rate, equity market, currency and credit environments, expected future cash flows, the probability of certain future events occurring, and other published data. The Group performs a variety of procedures to assess the reasonableness of its fair value determinations including the use of third parties. (iv) Foreign exchange forward contracts The Group designates certain foreign exchange forward contracts as cash flow hedges when all the requirements in IFRS 9 Financial Instruments Financial Instruments |
Cash and cash equivalents and restricted cash | (r) Cash and cash equivalents comprise cash on deposit at banks and on hand and highly liquid investments with maturities of three months or less at the date of purchase that are not subject to restrictions. Cash deposits that have restrictions governing their use are classified as restricted cash, current or non-current, based on the remaining length of the restriction. |
Short term investments | (s) The Group invests in a variety of instruments, such as commercial paper, corporate debt securities, collateralized reverse purchase agreements, and government and agency debt securities. Part of these investments are held in short duration fixed income portfolios. The average duration of these instruments is less than two years. All investments are governed by an investment policy and are held in highly-rated counterparties. Separate credit limits are assigned to each counterparty in order to minimize risk concentration. These investments are classified as debt instruments and are carried at fair value with the unrealized gains and losses reported as a component of equity. Management determines the appropriate classification of investments at the time of purchase and re-evaluates whether the investments pass both the hold to collect and sell and solely payments of principal and interest tests. The short term investments with maturities greater than twelve months are classified as short term when they are intended for use in current operations. The cost basis for investments sold is based upon the specific identification method. |
Long term investments | (t) Long term investments consist of non-controlling equity interests in public and private companies where the Group does not exercise significant influence. The investments are classified as equity instruments carried at fair value through other comprehensive income. Refer to Note 23. |
Share capital | (u) Ordinary shares are classified as equity. Equity instruments are initially measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. In 2018, the Group began repurchasing its ordinary shares. The cost of treasury shares repurchased is shown as a reduction to equity, within treasury shares, on the statement of financial position. When treasury shares are sold, reissued, or retired, the amount received is reflected as an increase to equity based on a weighted average cost, with any surplus or deficit recorded within Other paid in capital. |
Share-based payments | (v) Employees of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services in consideration for equity instruments. The cost of equity-settled transactions with employees is determined by the fair value at the date of grant using an appropriate valuation model. The cost is recognized in the consolidated statement of operations, together with a corresponding credit to other reserves in equity, over the period in which the performance and service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions with employees at each reporting date until the vesting date reflects the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense for a period represents the movement in cumulative expense recognized at the beginning and end of that period, and is recognized in employee share-based payments. When the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for modifications that increase the total fair value of the share-based payment transaction or are otherwise beneficial to the grantee as measured at the date of modification. There were no material modifications to any share-based payment transactions during 2019, 2018, and 2017. Social costs are payroll taxes associated with employee salaries and benefits, including share-based compensation. Social costs in connection with granted options and restricted stock units are accrued over the vesting period based on the intrinsic value of the award that has been earned at the end of each reporting period. The amount of the liability reflects the amortization of the award and the impact of expected forfeitures. The social cost rate at which the accrual is made generally follows the tax domicile within which other compensation charges for a grantee are recognized. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 18. In many jurisdictions, tax authorities levy taxes on share-based payment transactions with employees that give rise to a personal tax liability for the employee. In some cases, the Group is required to withhold the tax due and to settle it with the tax authority on behalf of the employees. To fulfil this obligation, the terms of the Group’s restricted stock unit arrangements permit the Group to withhold the number of shares that are equal to the monetary value of the employee’s tax obligation from the total number of shares that otherwise would have been issued to the employee upon vesting of the restricted stock unit. The monetary value of the employee’s tax obligation is recorded as a deduction from Other reserves for the shares withheld. |
Employee benefits | (w) The Group provides defined contribution plans to its employees. The Group pays contributions to publicly and privately administered pension insurance plans on a mandatory or contractual basis. The Group has no further payment obligations once the contributions have been paid. Contributions to defined contribution plans are expensed when employees provide services. The Group’s post-employment schemes do not include any defined benefit plans. |
Provisions | (x) Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. |
New and amended standards and interpretations adopted by the Group | New and amended standards and interpretations adopted by the Group On January 1, 2019, the Group adopted IFRS 16, Leases On January 1, 2019, the Group adopted International Financial Reporting Interpretations Committee (“IFRIC”) Interpretation 23, Uncertainty over Income Tax Treatments |
New standards and interpretations issued not yet effective | New standards and interpretations issued not yet effective There are no IFRS or IFRIC interpretations that are not effective that are expected to have a material impact. |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Operating Segments [Line Items] | |
Summary of Key Financial Performance Measures of Segments Including Revenue, Cost of Revenue, and Gross Profit | Key financial performance measures of the segments including revenue, cost of revenue, and gross profit are as follows: 2019 2018 2017 (in € millions) Premium Revenue 6,086 4,717 3,674 Cost of revenue 4,465 3,461 2,868 Gross profit 1,621 1,256 806 Ad-Supported Revenue 678 542 416 Cost of revenue 577 445 373 Gross (loss)/profit 101 97 43 Consolidated Revenue 6,764 5,259 4,090 Cost of revenue 5,042 3,906 3,241 Gross profit 1,722 1,353 849 |
Summary of Reconciliation Between Reportable Segment Gross Profit and Loss to Consolidated Loss Before Tax | The reconciliation between reportable segment gross profit to the Group’s loss before tax is as follows: 2019 2018 2017 (in € millions) Segment gross profit 1,722 1,353 849 Research and development (615 ) (493 ) (396 ) Sales and marketing (826 ) (620 ) (567 ) General and administrative (354 ) (283 ) (264 ) Finance income 275 455 118 Finance costs (333 ) (584 ) (974 ) Share in (losses)/earnings of associate — (1 ) 1 Loss before tax (131 ) (173 ) (1,233 ) |
Summary of Revenue and Non-current Asset by Geographic Country | Revenue by country 2019 2018 2017 (in € millions) United States 2,542 1,973 1,577 United Kingdom 727 576 444 Luxembourg 4 3 3 Other countries 3,491 2,707 2,066 6,764 5,259 4,090 |
Property and Equipment and Lease Right-of-Use Assets | |
Disclosure Of Operating Segments [Line Items] | |
Summary of Revenue and Non-current Asset by Geographic Country | Non-current assets for this purpose consists of property and equipment and lease right-of-use assets. 2019 2018 2017 (in € millions) Sweden 154 29 32 United States 525 142 28 United Kingdom 79 19 6 Other countries 22 7 7 780 197 73 |
Personnel expenses (Tables)
Personnel expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Classes Of Employee Benefits Expense [Abstract] | |
Summary of Personnel Expenses | 2019 2018 2017 (in € millions, except employee data) Wages and salaries 541 409 348 Social costs 111 90 136 Contributions to retirement plans 26 20 17 Share-based payments 122 88 65 Other employee benefits 88 60 48 888 667 614 Average full-time employees 4,405 3,651 2,960 |
Auditor remuneration (Tables)
Auditor remuneration (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Auditors Remuneration [Abstract] | |
Summary of Auditor Remuneration | 2019 2018 2017 (in € millions) Auditor fees 5 4 5 |
Finance income and costs (Table
Finance income and costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Finance Income And Costs [Abstract] | |
Summary of Finance Income and Costs | 2019 2018 2017 (in € millions) Finance income Fair value movements on derivative liabilities (Note 23) 182 376 97 Interest income 31 25 19 Other financial income 1 11 2 Foreign exchange gains 61 43 — Total 275 455 118 Finance costs Fair value movements on derivative liabilities (Note 23) (235 ) (360 ) (303 ) Fair value movements on Convertible Notes (Note 23) — (201 ) (524 ) Interest expense on lease liabilities (38 ) — — Interest, bank fees and other costs (5 ) (6 ) (4 ) Foreign exchange losses (55 ) (17 ) (143 ) Total (333 ) (584 ) (974 ) |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Income Tax [Abstract] | |
Summary of Income Tax Expense (Benefit) | 2019 2018 2017 (in € millions) Current tax expense Current year 45 41 6 Changes in estimates in respect to prior year (1 ) — 1 44 41 7 Deferred tax expense/(benefit) Temporary differences 27 (123 ) (5 ) Change in recognition of deferred tax (17 ) (14 ) — Change in tax rates 1 1 — 11 (136 ) (5 ) Income tax expense/(benefit) 55 (95 ) 2 |
Summary of Reconciliation Between Reported Tax Expense and Theoretical Tax Expense Loss Before Taxes | A reconciliation between the reported tax expense for the year, and the theoretical tax expense that would arise when applying the statutory tax rate in Luxembourg of 24.94%, 26.01%, and 27.08%, and on the consolidated loss before taxes for the years ended December 31, 2019, 2018, and 2017, respectively, is shown in the table below: 2019 2018 2017 (in € millions) Loss before tax (131 ) (173 ) (1,233 ) Tax using the Luxembourg tax rate (33 ) (45 ) (334 ) Effect of tax rates in foreign jurisdictions 2 (11 ) (10 ) Permanent differences 58 (7 ) 15 Change in unrecognized deferred taxes 29 (43 ) 329 Deferred tax on foreign exchange differences 1 8 — Other (2 ) 3 2 Income tax expense/(benefit) 55 (95 ) 2 |
Schedule of Major Components of Deferred Tax Assets and Liabilities | The major components of deferred tax assets and liabilities are comprised of the following: 2019 2018 (in € millions) Intangible assets (42 ) (1 ) Share-based compensation 14 6 Tax losses carried forward 78 147 Property and equipment 79 5 Unrealized gains (126 ) (154 ) Other 4 3 Net tax 7 6 |
Summary of Reconciliation of Net Deferred Tax | A reconciliation of net deferred tax is shown in the table below: 2019 2018 2017 (in € millions) At January 1 6 6 3 Movement recognized in consolidated statement of operations (11 ) 136 5 Movement recognized in consolidated statement of changes in equity and other comprehensive income 18 (136 ) 2 Movement due to acquisition (6 ) — (4 ) At December 31 7 6 6 |
Summary of Deferred Tax Reconciliation to Balance Sheet | Reconciliation to consolidated statement of financial position 2019 2018 (in € millions) Deferred tax assets 9 8 Deferred tax liabilities 2 2 |
Summary of Deferred Tax Assets Unrecognized | Deferred tax assets have not been recognized in respect of the following items, because it is not probable that future taxable profit will be available against which the Group can use the benefits. 2019 2018 (in € millions) Intangible assets 77 72 Share-based compensation 58 34 Tax losses carried forward 192 148 Unrealized losses 3 2 Other 49 20 379 276 |
Schedule of Tax Loss Carry-forwards Expected to Expire | Tax loss carry-forwards as at December 31, 2019 were expected to expire as follows: Expected expiry 2020-2029 2030 and onwards Unlimited Total (in € millions) Tax loss carry-forwards — 509 996 1,505 Research and development credit carryforward — 16 — 16 Foreign tax credits 4 — — 4 |
Loss per share (Tables)
Loss per share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Loss Per Share | The computation of loss per share for the respective periods is as follows 2019 2018 2017 (in € millions, except share and per share data) Basic loss per share Net loss attributable to owners of the parent (186 ) (78 ) (1,235 ) Shares used in computation: Weighted-average ordinary shares outstanding 180,960,579 177,154,405 151,668,769 Basic net loss per share attributable to owners of the parent (1.03 ) (0.44 ) (8.14 ) Diluted loss per share Net loss attributable to owners of the parent (186 ) (78 ) (1,235 ) Fair value adjustments on warrants — (14 ) — Net loss used in the computation of diluted loss per share (186 ) (92 ) (1,235 ) Shares used in computation: Weighted-average ordinary shares outstanding 180,960,579 177,154,405 151,668,769 Warrants — 4,055,887 — Diluted weighted average ordinary shares 180,960,579 181,210,292 151,668,769 Diluted net loss per share attributable to owners of the parent (1.03 ) (0.51 ) (8.14 ) |
Summary of Anti-dilutive Securities | Potential dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: 2019 2018 2017 Employee options 12,153,772 12,243,526 14,646,720 Restricted stock units 638,350 100,383 195,937 Restricted stock awards 41,280 61,880 61,880 Other contingently issuable shares 162,320 — — Warrants 2,400,000 — 6,720,000 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Leases [Abstract] | |
Summary of Reconciliation of Lease Liabilities Related to Lease Commitments | Below is a reconciliation of lease liabilities related to lease commitments as of the date recognized due to the modified retrospective application of IFRS 16: January 1, 2019 (in € millions) Total lease commitments as of December 31, 2018 833 Impact of discounting remaining lease payments (285 ) Recognition exemption for short-term leases (7 ) Total lease liabilities included in the consolidated statement of financial position at January 1, 2019 541 Current 20 Non-current 521 Total 541 |
Summary of Roll-forward of Lease Right-of-use Assets | The Group’s right of use assets are comprised of leased office space. Below is the roll-forward of lease right-of-use assets: Right of use assets (in € millions) Cost At January 1, 2019 471 Increases 138 Acquired in business combinations 11 Decreases (39 ) Exchange differences 6 At December 31, 2019 587 Accumulated depreciation At January 1, 2019 (75 ) Depreciation charge (42 ) Decreases 21 Exchange differences (2 ) At December 31, 2019 (98 ) Cost, net accumulated depreciation At January 1, 2019 396 At December 31, 2019 489 |
Summary of Maturity Analysis of Lease Liabilities | Below is the maturity analysis of lease liabilities: Lease liabilities December 31, 2019 Maturity Analysis (in € millions) Less than one year 79 One to five years 317 More than five years 589 Total lease commitments 985 Impact of discounting remaining lease payments (324 ) Lease incentives receivable (32 ) Total lease liabilities 629 Lease liabilities included in the consolidated statement of financial position Current 7 Non-current 622 Total 629 (1) Excluded from the lease commitments above are short-term leases that are not recognized under IFRS 16 based on the Group’s election of the practical expedient. Additionally, the Group has entered into certain lease agreements with approximately €19 million of commitments, which have not commenced as of December 31, 2019, and as such, have not been recognized on the consolidated statement of financial position. |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment Leasehold improvements Total (in € millions) Cost At January 1, 2018 105 73 178 Additions 3 142 145 Disposals (46 ) (1 ) (47 ) Exchange differences (1 ) 2 1 At December 31, 2018 61 216 277 Additions 20 106 126 Acquired in business combinations 1 5 6 Disposals (29 ) (38 ) (67 ) Exchange differences 1 6 7 At December 31, 2019 54 295 349 Accumulated depreciation At January 1, 2018 (84 ) (21 ) (105 ) Depreciation charge (12 ) (9 ) (21 ) Disposals 45 — 45 Exchange differences 1 — 1 At December 31, 2018 (50 ) (30 ) (80 ) Depreciation charge (8 ) (21 ) (29 ) Impairment charge — (6 ) (6 ) Disposals 30 28 58 Exchange differences (1 ) — (1 ) At December 31, 2019 (29 ) (29 ) (58 ) Cost, net accumulated depreciation At December 31, 2018 11 186 197 At December 31, 2019 25 266 291 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Abstract] | |
Summary of Goodwill and Intangible Assets | Internal development costs and patents Acquired intangible assets Total Goodwill Total (in € millions) Cost At January 1, 2018 18 17 35 135 170 Additions 8 — 8 — 8 Acquisition, business combination (Note 5) — 3 3 8 11 Exchange differences — 1 1 3 4 At December 31, 2018 26 21 47 146 193 Additions 19 — 19 — 19 Acquisition, business combination — 27 27 328 355 Exchange differences — (1 ) (1 ) 4 3 At December 31, 2019 45 47 92 478 570 Accumulated amortization At January 1, 2018 (6 ) (2 ) (8 ) — (8 ) Amortization charge (6 ) (5 ) (11 ) — (11 ) At December 31, 2018 (12 ) (7 ) (19 ) — (19 ) Amortization charge (7 ) (9 ) (16 ) — (16 ) Exchange differences — 1 1 — 1 At December 31, 2019 (19 ) (15 ) (34 ) — (34 ) Cost, net accumulated amortization At December 31, 2018 14 14 28 146 174 At December 31, 2019 26 32 58 478 536 |
Schedule of Carrying Amount of Goodwill Allocated to Each of the Operating Segments | The carrying amount of goodwill allocated to each of the operating segments is as follows: Premium Ad-Supported Premium Ad-Supported 2019 2019 2018 2018 (in € millions) Goodwill 130 348 128 18 |
Restricted cash and other non_2
Restricted cash and other non-current assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Restricted Cash And Other Non Current Assets [Abstract] | |
Summary of Restricted Cash and Other Non-current Assets | 2019 2018 (in € millions) Restricted cash Lease deposits and guarantees 54 52 Other 1 3 Other non-current assets 14 10 69 65 |
Trade and Other Receivables (Ta
Trade and Other Receivables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Trade And Other Receivables [Abstract] | |
Summary of Net Trade and Other Receivables | 2019 2018 (in € millions) Trade receivables 305 286 Less: allowance for expected credit losses (5 ) (8 ) Less: provision for credit reserves (3 ) (5 ) Trade receivables – net 297 273 Other 105 127 402 400 |
Summary of Aging of Group' s Trade Receivables | The aging of the Group’s net trade receivables is as follows: 2019 2018 (in € millions) Current 209 195 Overdue 1 – 30 days 51 44 Overdue 31 – 60 days 19 19 Overdue 60 – 90 days 10 7 Overdue more than 90 days 8 8 297 273 |
Summary of Movements in Group' s Allowance for Expected Credit Losses | The movements in the Group’s allowance for expected credit losses are as follows: 2019 2018 (in € millions) At January 1 8 15 Provision for expected credit losses 12 15 Reversal of unutilized provisions (12 ) (18 ) Receivables written off (3 ) (4 ) At December 31 5 8 |
Issued Share Capital and Othe_2
Issued Share Capital and Other Reserves (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Classes Of Share Capital [Abstract] | |
Summary of Other Reserves | Other reserves 2019 2018 2017 (in € millions) Currency translation At January 1 (15 ) (7 ) (4 ) Currency translation 4 (6 ) (3 ) Gains reclassified to consolidated statement of operations — (2 ) — At December 31 (11 ) (15 ) (7 ) Short term investments At January 1 (4 ) (5 ) (4 ) Gains/(losses) on fair value that may be subsequently reclassified to consolidated statement of operations 7 (2 ) (2 ) Losses reclassified to consolidated statement of operations — 2 1 Deferred tax (2 ) 1 — At December 31 1 (4 ) (5 ) Long term investments At January 1 561 (11 ) — (Losses)/gains on fair value not to be subsequently reclassified to consolidated statement of operations (149 ) 720 (11 ) Deferred tax 32 (148 ) — At December 31 444 561 (11 ) Cash flow hedges At January 1 (1 ) — — (Losses)/gains on fair value that may be subsequently reclassified to consolidated statement of operations (7 ) 1 — Losses/(gains) reclassified to revenue 10 (5 ) — (Gains)/losses reclassified to cost of revenue (7 ) 3 — Deferred tax 1 — — At December 31 (4 ) (1 ) — Share-based payments At January 1 334 200 130 Share-based payments (Note 18) 127 88 67 Income tax impact associated with share-based payments (Note 10) 26 48 3 Issuance of share-based payments in conjunction with business combinations (Note 5) 13 — — Restricted stock units withheld for employee taxes (6 ) (2 ) — At December 31 494 334 200 Other reserves at December 31 924 875 177 |
Share-based Payments (Tables)
Share-based Payments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Share Based Payments [Abstract] | |
Schedule of Activities in RSUs, RSAs and Other Contingently Issuable Shares Outstanding and Related Information | Activity in the RSUs, RSAs, and other contingently issuable shares outstanding and related information is as follows: RSUs RSAs Other Number of RSUs Weighted average grant date fair value Number of Awards Weighted average grant date fair value Number of Awards Weighted average grant date fair value US$ US$ US$ Outstanding at January 1, 2017 501,480 36.73 — — — — Granted 80,920 59.63 61,880 90.65 — — Forfeited (85,903 ) 37.43 — — — — Released (300,560 ) 38.95 — — — — Outstanding at December 31, 2017 195,937 42.46 61,880 90.65 — — Granted 14,383 168.24 — — — — Forfeited (15,991 ) 34.93 — — — — Released (93,946 ) 40.12 — — — — Outstanding at December 31, 2018 100,383 63.87 61,880 90.65 — — Granted 715,224 137.15 — — 162,320 145.21 Forfeited (48,754 ) 118.96 — — — — Released (128,503 ) 98.52 (20,600 ) 90.65 — — Outstanding at December 31, 2019 638,350 134.79 41,280 90.65 162,320 134.15 |
Schedule of Activity in Stock Options Outstanding and Related Information | Activity in the stock options outstanding and related information is as follows: Options Number of options Weighted average exercise price US$ Outstanding at January 1, 2017 10,976,480 36.88 Granted 5,819,520 64.11 Forfeited (659,000 ) 46.34 Exercised (1,422,520 ) 22.23 Expired (67,760 ) 28.49 Outstanding at December 31, 2017 14,646,720 48.73 Granted 3,578,000 142.20 Forfeited (1,220,508 ) 62.82 Exercised (4,736,555 ) 40.97 Expired (24,131 ) 54.98 Outstanding at December 31, 2018 12,243,526 77.63 Granted 4,152,565 147.11 Forfeited (719,860 ) 105.01 Exercised (3,478,660 ) 49.41 Expired (43,799 ) 117.79 Outstanding at December 31, 2019 12,153,772 107.68 Exercisable at December 31, 2017 5,822,400 39.62 Exercisable at December 31, 2018 5,162,876 58.25 Exercisable at December 31, 2019 5,553,650 84.18 |
Summary of Stock Options Outstanding | The stock options outstanding December 31, 2019, 2018, and 2017 are comprised of the following: 2019 2018 2017 Range of exercise prices (US$) Number of options Weighted average remaining contractual life (years) Number of options Weighted average remaining contractual life (years) Number of options Weighted average remaining contractual life (years) 1.65 to 45.00 2,130,161 0.9 4,753,052 1.8 9,039,248 2.7 45.01 to 90.00 2,482,270 2.2 3,337,414 3.2 4,736,432 4.2 90.01 to 135.00 2,946,838 3.4 2,695,890 3.9 871,040 4.2 135.01 to 180.00 3,318,423 4.1 749,360 4.3 — — 180.01 to 233.42 1,276,080 3.7 707,810 4.2 — — 12,153,772 2.9 12,243,526 2.9 14,646,720 3.3 |
Summary of Black-Scholes Option-Pricing Models | The following table lists the inputs to the Black-Scholes option-pricing models used for employee share-based payments for the years ended December 31, 2019, 2018, and 2017: 2019 2018 2017 Expected volatility (%) 30.1 – 35.2 32.0 – 34.7 32.0 – 43.5 Risk-free interest rate (%) 1.4 – 2.6 2.4 – 2.9 1.4 – 2.0 Expected life of stock options (years) 2.5 – 4.8 2.4 – 4.4 2.4 – 4.4 Weighted-average share price (US$) 136.09 142.20 64.11 |
Summary of Impact of Changes on Stock Options Expense for Options Granted | The following table shows the impact of these changes on stock option expense for the options granted in 2019: 2019 (in € millions) Actual stock option expense 48 Stock option expense increase (decrease) under the following assumption changes Volatility decreased by 10% (13 ) Volatility increase by 10% 13 Expected life decrease by 1 year (9 ) Expected life increase by 1 year 8 |
Summary of Expense Recognized in Consolidated Statement of Operations for Employee Share Based Payments | The expense recognized in the consolidated statement of operations for employee share-based payments is as follows: 2019 2018 2017 (in € millions) Cost of revenue 4 3 2 Research and development 61 40 21 Sales and marketing 27 19 15 General and administrative 30 26 27 122 88 65 |
Trade and other payables (Table
Trade and other payables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Trade And Other Payables [Abstract] | |
Summary of Trade and Other Payables | 2019 2018 (in € millions) Trade payables 377 295 Value added tax and sales taxes payable 148 118 Other current liabilities 24 14 549 427 |
Accrued expenses and other li_2
Accrued expenses and other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Accrued Expenses And Other Liabilities [Abstract] | |
Summary of Accrued Expenses and Other Liabilities | 2019 2018 (in € millions) Non-current Deferred rent — 85 Other accrued liabilities 20 — 20 85 Current Accrued fees to rights holders 1,153 832 Accrued salaries, vacation, and related taxes 54 41 Accrued social costs for options and RSUs 64 64 Other accrued expenses 167 139 1,438 1,076 1,458 1,161 |
Provisions (Tables)
Provisions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Provisions [Abstract] | |
Summary of Changes in Groups Provisions | Legal contingencies Other Total (in € millions) Carrying amount at January 1, 2018 53 12 65 Charged/(credited) to the consolidated statement of operations: Additional provisions — 5 5 Exchange differences 3 — 3 Utilized (17 ) (8 ) (25 ) Carrying amount at December 31, 2018 39 9 48 Charged/(credited) to the consolidated statement of operations: Additional provisions 11 5 16 Reversal of unutilized amounts — (3 ) (3 ) Exchange differences 2 — 2 Utilized (47 ) (1 ) (48 ) Carrying amount at December 31, 2019 5 10 15 As at December 31, 2018 Current portion 39 3 42 Non-current portion — 6 6 As at December 31, 2019 Current portion 5 8 13 Non-current portion — 2 2 |
Financial Risk Management and_2
Financial Risk Management and Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |
Summary of Liquidity Position in Terms of Available Cash and Cash Equivalents and Short Term Investments | The Group’s policy is to have a strong liquidity position in terms of available cash and cash equivalents, and short term investments. 2019 2018 (in € millions) Liquidity Short term investments 692 915 Short term deposits 585 307 Cash at bank and on hand 480 584 Total surplus liquidity 1,757 1,806 Liquidity position 1,757 1,806 |
Summary of Immediate Impact on Net Loss Before Tax on Exchange Rate | The table below shows the immediate impact on net loss before tax of a 10% strengthening in the closing exchange rate of significant currencies to which the Group had exposure, at December 31, 2019 and 2018 2019 SEK USD (in € millions) (Increase)/decrease in loss before tax (13 ) 121 2018 SEK USD (in € millions) (Increase)/decrease in loss before tax — 74 |
Summary of Notional Principal of Foreign Currency Exchange Contracts by Hedged Line Item in Statement of Operations | The following table summarizes the notional principal of the foreign currency exchange contracts by hedged line item in the statement of operations as of December 31, 2019: Notional amount in foreign currency Australian dollar (AUD) British pound (GBP) Canadian dollar (CAD) Norwegian krone (NOK) Swedish krona (SEK) U.S. dollar (USD) (in millions) Hedged line item in consolidated statement of operations Revenue 226 328 194 739 1,221 38 Cost of revenue 176 242 141 499 832 29 Total 402 570 335 1,238 2,053 67 The following table summarizes the notional principal of the foreign currency exchange contracts by hedged line item in the statement of operations as of December 31, 2018: Notional amount in foreign currency Australian dollar (AUD) British pound (GBP) Swedish krona (SEK) U.S. dollar (USD) (in millions) Hedged line item in consolidated statement of operations Revenue 187 282 1,112 27 Cost of revenue 143 202 757 21 Total 330 484 1,869 48 |
Summary of Major Security Type, Financial Assets and Liabilities Measured at Fair Value on Recurring Basis and Category Using Fair Value Hierarchy | The following tables summarize, by major security type, the Group’s financial assets and liabilities that are measured at fair value on a recurring basis, and the category using the fair value hierarchy. The different levels have been defined in Note 2. Financial assets and liabilities by fair value hierarchy level Level 1 Level 2 Level 3 December 31, 2019 (in € millions) Financial assets at fair value Short term investments: Government securities 229 39 — 268 Agency securities — 5 — 5 Corporate notes — 263 — 263 Collateralized reverse purchase agreements — 156 — 156 Derivatives (designated for hedging): Foreign exchange forwards — 8 — 8 Long term investments 1,481 — 16 1,497 Total financial assets at fair value by level 1,710 471 16 2,197 Financial liabilities at fair value Derivatives (not designated for hedging): Warrants — — 98 98 Derivatives (designated for hedging): Foreign exchange forwards — 13 — 13 Contingent consideration — — 27 27 Total financial liabilities at fair value by level — 13 125 138 Financial assets and liabilities by fair value hierarchy level Level 1 Level 2 Level 3 December 31, 2018 (in € millions) Financial assets at fair value Short term investments: Government securities 164 57 — 221 Agency securities — 7 — 7 Corporate notes — 343 — 343 Collateralized reverse purchase agreements — 344 — 344 Derivatives (designated for hedging): Foreign exchange forwards — 6 — 6 Derivatives (not designated for hedging): Other — — 2 2 Long term investments 1,630 — 16 1,646 Total financial assets at fair value by level 1,794 757 18 2,569 Financial liabilities at fair value Derivatives (not designated for hedging): Warrants — — 333 333 Derivatives (designated for hedging): Foreign exchange forwards — 6 — 6 Total financial liabilities at fair value by level — 6 333 339 |
Summary of Weightings Applied to Valuation Method | The following weightings, up until the Group’s direct listing, were applied to each valuation method: 2018 2017 PWERM 50% 50 – 80% Secondary market transactions 50% 20 – 50% |
Summary of Key Assumptions Used to Estimate Fair Value of Ordinary Shares and Contingent Options | The key assumptions used to estimate the fair value of the ordinary shares and contingent options using the PWERM, up until the Group’s direct listing, were as follows: 2018 2017 Revenue multiple used to estimate enterprise value 3.0 2.2 – 4.6 Discount rate (%) 13.0 13.0 – 19.5 Volatility (%) 32.5 – 35.0 30.0 – 37.5 |
Summary of Assumption Used to Estimate Fair Value of Warrants | The warrants are valued using a Black-Scholes option-pricing model, which includes inputs determined from models that include the value of the Company’s ordinary shares, as determined above and additional assumptions used to estimate the fair value of the warrants in the option pricing model as follows: 2019 2018 2017 Expected term (years) 0.5 – 2.5 0.8 – 1.5 0.9 – 1.1 Risk free rate (%) 1.58 – 1.59 2.55 – 2.58 1.71 – 1.76 Volatility (%) 32.5 40.0 30.0 Share price (US$) 149.55 113.50 120.50 |
Summary of Changes in Warrants Liability | The table below presents the changes in the warrants liability: 2019 2018 2017 (in € millions) At January 1 333 346 34 Issuance of warrant for cash 15 — 9 Issuance of shares upon exercise of, or net settlement of, warrants (303 ) — — Non cash changes recognized in profit or loss Changes in fair value 35 (39 ) 313 Effect of changes in foreign exchange rates 18 26 (10 ) At December 31 98 333 346 |
Summary of Changes in Contingent Consideration Liability | The table below presents the changes in the contingent consideration liability: 2019 (in € millions) At January 1 — Initial recognition of contingent consideration included in purchase consideration of acquisition 13 Non cash changes recognized in profit or loss Changes in fair value 14 At December 31 27 |
Summary of Changes in Convertible Notes | The table below presents the changes in the Convertible Notes: 2018 2017 (in € millions) At January 1 944 1,106 Non cash changes recognized in profit or loss Changes in fair value 221 666 Effect of changes in foreign exchange rates (20 ) (142 ) Issuance of shares upon exchange of Convertible Notes (1,145 ) (686 ) At December 31 — 944 |
PWERM | |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |
Summary of Weightings Applied to Valuation Method | The PWERM valuations, up until the Group’s direct listing, weighted the different scenarios as follows: 2018 2017 Market Approach – High Case Public Company 55 – 70% 25 – 40% Market Approach – Low Case Public Company 28 – 35% 35% Market Approach – High Case Transaction 0 – 3% 4 – 6% Market Approach – Low Case Transaction 0 – 2% 4 – 6% Private Case – Income and Market Approaches 2 – 5% 5 – 30% |
TME | |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |
Summary of Changes in Investment in TME | The table below presents the changes in the investment in TME: 2019 2018 2017 (in € millions) At January 1 1,630 910 — Equity issued in exchange for long term investment — — 910 Changes in fair value recorded in other comprehensive loss (149 ) 720 — At December 31 1,481 1,630 910 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancellable Operating Leases | The future minimum lease payments under non-cancellable operating leases, prior to the adoption of IFRS 16, as at December 31, were as follows: 2018 2017 Not later than one year 62 47 Later than one year but not more than 5 years 288 244 More than 5 years 483 478 833 769 |
Schedule of Minimum Guarantees Relating to Service, Majority Relate to Minimum Royalty Payments Associated with License Agreements for the use of Licensed Content | The Group is subject to the following minimum guarantees relating to the content on its service, the majority of which relate to minimum royalty payments associated with its license agreements for the use of licensed content, as at December 31: 2019 2018 2017 (in € millions) Not later than one year 657 548 1,060 Later than one year but not more than 5 years 383 152 635 1,040 700 1,695 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Transactions Between Related Parties [Abstract] | |
Summary of Related Party Transactions | The disclosure amounts are based on the expense recognized in the consolidated statement of operations in the respective year. 2019 2018 2017 (in € millions) Key management compensation Short term employee benefits 5 4 4 Share-based payments 22 19 17 Termination benefits — 1 1 27 24 22 |
Group information (Tables)
Group information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Significant Investments In Subsidiaries [Abstract] | |
Summary of Company's Principal Subsidiaries | The Company’s principal subsidiaries as at December 31, 2019 are as follows: Name Principal activities Proportion of voting rights and shares held (directly or indirectly) Country of incorporation Spotify AB Main operating company 100 % Sweden Spotify USA Inc. USA operating company 100 % USA Spotify Ltd Sales, marketing, contract research and development, and customer support 100 % UK Spotify Norway AS Sales and marketing 100 % Norway Spotify Spain S.L. Sales and marketing 100 % Spain Spotify GmbH Sales and marketing 100 % Germany Spotify France SAS Sales and marketing 100 % France Spotify Netherlands B.V. Sales and marketing 100 % Netherlands Spotify Canada Inc. Sales and marketing 100 % Canada Spotify Australia Pty Ltd Sales and marketing 100 % Australia Spotify Brasil Serviços De Música LTDA Sales and marketing 100 % Brazil Spotify Japan K.K Sales and marketing 100 % Japan Spotify India LLP Sales and marketing 100 % India Spotify Singapore Pte Ltd. Marketing 100 % Singapore |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of summary of significant accounting policies [line items] | |
Term of financial liability settlement | 12 months |
Maturity of cash and cash equivalent | three months or less |
Material modifications to any share-based payment transactions | There were no material modifications to any share-based payment transactions during 2019, 2018, and 2017 |
Bottom of Range | Trade Names and Trademarks | |
Disclosure of summary of significant accounting policies [line items] | |
Estimated useful lives | 3 years |
Bottom of Range | Technology | |
Disclosure of summary of significant accounting policies [line items] | |
Estimated useful lives | 3 years |
Top of Range | |
Disclosure of summary of significant accounting policies [line items] | |
Average duration of investment portfolio | 2 years |
Top of Range | Trade Names and Trademarks | |
Disclosure of summary of significant accounting policies [line items] | |
Estimated useful lives | 8 years |
Top of Range | Technology | |
Disclosure of summary of significant accounting policies [line items] | |
Estimated useful lives | 5 years |
Property and Equipment | Bottom of Range | |
Disclosure of summary of significant accounting policies [line items] | |
Expected lease term | 1 year |
Estimated useful lives | 3 years |
Property and Equipment | Top of Range | |
Disclosure of summary of significant accounting policies [line items] | |
Expected lease term | 15 years |
Estimated useful lives | 5 years |
Leasehold Improvements | |
Disclosure of summary of significant accounting policies [line items] | |
Estimated useful lives | shorter of the lease term or useful life |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Contract Liabilities [Abstract] | |||
Deferred revenue | € 319 | € 258 | |
Description of when entity typically satisfies performance obligations | over a period up to a year | ||
Revenue recognition | € 248 | € 210 | € 149 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - EUR (€) | Apr. 01, 2019 | Feb. 15, 2019 | Feb. 14, 2019 | Dec. 31, 2019 |
Anchor FM Inc. | ||||
Disclosure of detailed information about business combination [line items] | ||||
Date of acquisition | Feb. 14, 2019 | |||
Total purchase consideration | € 136,000,000 | |||
Purchase consideration in cash | 125,000,000 | |||
Purchase consideration paid as share based payment awards | 11,000,000 | |||
Goodwill | 126,000,000 | |||
Acquired intangible assets | 9,000,000 | |||
Deferred tax liabilities | 2,000,000 | |||
Cash and cash equivalents | 4,000,000 | |||
Other liabilities | 1,000,000 | |||
Acquisition related costs | € 1,000,000 | |||
Goodwill expected to be deductible for tax purposes | € 0 | |||
Estimated useful lives | 3 years | |||
Equity instruments granted | € 20,000,000 | |||
Anchor FM Inc. | Top of Range | ||||
Disclosure of detailed information about business combination [line items] | ||||
Business combination, compensation expenses | € 9,000,000 | |||
Business combination potential contingent consideration period | 4 years | |||
Gimlet Media Inc. | ||||
Disclosure of detailed information about business combination [line items] | ||||
Date of acquisition | Feb. 15, 2019 | |||
Total purchase consideration | € 172,000,000 | |||
Purchase consideration in cash | 170,000,000 | |||
Purchase consideration paid as share based payment awards | 2,000,000 | |||
Goodwill | 148,000,000 | |||
Acquired intangible assets | 15,000,000 | |||
Deferred tax liabilities | 5,000,000 | |||
Cash and cash equivalents | 3,000,000 | |||
Content assets | 3,000,000 | |||
Other tangible net assets | 8,000,000 | |||
Acquisition related costs | 3,000,000 | |||
Goodwill expected to be deductible for tax purposes | 0 | |||
Gimlet Media Inc. | Top of Range | ||||
Disclosure of detailed information about business combination [line items] | ||||
Business combination, compensation expenses | € 40,000,000 | |||
Business combination potential contingent consideration period | 4 years | |||
Gimlet Media Inc. | Top of Range | Intangible Assets and Content Assets | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 8 years | |||
Gimlet Media Inc. | Bottom of Range | Intangible Assets and Content Assets | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 2 years | |||
Cutler Media, LLC | ||||
Disclosure of detailed information about business combination [line items] | ||||
Date of acquisition | Apr. 1, 2019 | |||
Total purchase consideration | € 49,000,000 | |||
Purchase consideration in cash | 36,000,000 | |||
Goodwill | 46,000,000 | |||
Acquired intangible assets | 2,000,000 | |||
Content assets | 1,000,000 | |||
Acquisition related costs | 1,000,000 | |||
Goodwill expected to be deductible for tax purposes | € 0 | |||
Estimated fair value of contingent consideration | € 13,000,000 | |||
Business combination potential contingent consideration period | 3 years | |||
Cutler Media, LLC | Top of Range | ||||
Disclosure of detailed information about business combination [line items] | ||||
Business combination, compensation expenses | € 10,000,000 | |||
Business combination potential contingent consideration period | 4 years | |||
Potential contingent consideration | € 43,000,000 | |||
Cutler Media, LLC | Top of Range | Intangible Assets and Content Assets | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 6 years | |||
Cutler Media, LLC | Bottom of Range | Intangible Assets and Content Assets | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 2 years |
Segment Information - Additiona
Segment Information - Additional Information (Details) | Dec. 31, 2019EUR (€)Segment | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) |
Disclosure Of Operating Segments [Line Items] | |||
Number of reportable segment | Segment | 2 | ||
Property and equipment | € 291,000,000 | € 197,000,000 | |
Luxembourg | |||
Disclosure Of Operating Segments [Line Items] | |||
Property and equipment | € 0 | € 0 | € 0 |
Segment Information - Summary o
Segment Information - Summary of Key Financial Performance Measures of Segments Including Revenue, Cost of Revenue, and Gross Profit (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Operating Segments [Line Items] | |||
Revenue | € 6,764 | € 5,259 | € 4,090 |
Cost of revenue | 5,042 | 3,906 | 3,241 |
Gross (loss)/profit | 1,722 | 1,353 | 849 |
Premium | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | 6,086 | 4,717 | 3,674 |
Cost of revenue | 4,465 | 3,461 | 2,868 |
Gross (loss)/profit | 1,621 | 1,256 | 806 |
Ad-Supported | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | 678 | 542 | 416 |
Cost of revenue | 577 | 445 | 373 |
Gross (loss)/profit | € 101 | € 97 | € 43 |
Segment Information - Summary_2
Segment Information - Summary of Reconciliation Between Reportable Segment Gross Profit and Loss to Consolidated Loss Before Tax (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Operating Segments [Abstract] | |||
Segment gross profit | € 1,722 | € 1,353 | € 849 |
Research and development | (615) | (493) | (396) |
Sales and marketing | (826) | (620) | (567) |
General and administrative | (354) | (283) | (264) |
Finance income | 275 | 455 | 118 |
Finance costs | (333) | (584) | (974) |
Share in (losses)/earnings of associate | 0 | (1) | 1 |
Loss before tax | € (131) | € (173) | € (1,233) |
Segment Information - Summary_3
Segment Information - Summary of Revenue by Geographic Area (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Operating Segments [Line Items] | |||
Revenue | € 6,764 | € 5,259 | € 4,090 |
United States | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | 2,542 | 1,973 | 1,577 |
United Kingdom | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | 727 | 576 | 444 |
Luxembourg | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | 4 | 3 | 3 |
Other Countries | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | € 3,491 | € 2,707 | € 2,066 |
Segment Information - Summary_4
Segment Information - Summary of Non-current Asset by Geographic Area (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure Of Operating Segments [Line Items] | |||
Non-current assets | € 2,891 | € 2,090 | |
Property and Equipment and Lease Right-of-Use Assets | |||
Disclosure Of Operating Segments [Line Items] | |||
Non-current assets | 780 | 197 | € 73 |
Property and Equipment and Lease Right-of-Use Assets | Sweden | |||
Disclosure Of Operating Segments [Line Items] | |||
Non-current assets | 154 | 29 | 32 |
Property and Equipment and Lease Right-of-Use Assets | United States | |||
Disclosure Of Operating Segments [Line Items] | |||
Non-current assets | 525 | 142 | 28 |
Property and Equipment and Lease Right-of-Use Assets | United Kingdom | |||
Disclosure Of Operating Segments [Line Items] | |||
Non-current assets | 79 | 19 | 6 |
Property and Equipment and Lease Right-of-Use Assets | Other Countries | |||
Disclosure Of Operating Segments [Line Items] | |||
Non-current assets | € 22 | € 7 | € 7 |
Personnel Expenses - Summary of
Personnel Expenses - Summary of Personnel Expense (Detail) € in Millions | 12 Months Ended | ||
Dec. 31, 2019EUR (€)Employee | Dec. 31, 2018EUR (€)Employee | Dec. 31, 2017EUR (€)Employee | |
Classes Of Employee Benefits Expense [Abstract] | |||
Wages and salaries | € 541 | € 409 | € 348 |
Social costs | 111 | 90 | 136 |
Contributions to retirement plans | 26 | 20 | 17 |
Share-based payments | 122 | 88 | 65 |
Other employee benefits | 88 | 60 | 48 |
Personnel expenses | € 888 | € 667 | € 614 |
Average full-time employees | Employee | 4,405 | 3,651 | 2,960 |
Auditor Remuneration - Summary
Auditor Remuneration - Summary of Auditor Remuneration (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Auditors Remuneration [Abstract] | |||
Auditor fees | € 5 | € 4 | € 5 |
Finance Income and Costs - Summ
Finance Income and Costs - Summary of Finance Income and Cost (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finance income | |||
Fair value movements on derivative liabilities | € 182 | € 376 | € 97 |
Interest income | 31 | 25 | 19 |
Other financial income | 1 | 11 | 2 |
Foreign exchange gains | 61 | 43 | 0 |
Total | 275 | 455 | 118 |
Finance costs | |||
Fair value movements on derivative liabilities | (235) | (360) | (303) |
Fair value movements on Convertible Notes | 0 | (201) | (524) |
Interest expense on lease liabilities | (38) | 0 | 0 |
Interest, bank fees and other costs | (5) | (6) | (4) |
Foreign exchange losses | (55) | (17) | (143) |
Total | € (333) | € (584) | € (974) |
Income Tax - Summary of Income
Income Tax - Summary of Income Tax Expense (Benefit) (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax expense | |||
Current year | € 45 | € 41 | € 6 |
Changes in estimates in respect to prior year | (1) | 0 | 1 |
Total current tax expense | 44 | 41 | 7 |
Deferred tax expense/(benefit) | |||
Temporary differences | 27 | (123) | (5) |
Change in recognition of deferred tax | (17) | (14) | 0 |
Change in tax rates | 1 | 1 | 0 |
Total deferred tax expense/(benefit) | 11 | (136) | (5) |
Income tax expense/(benefit) | € 55 | € (95) | € 2 |
Income Tax - Additional Informa
Income Tax - Additional Information (Details) - EUR (€) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Income Tax [Line Items] | |||
Income tax (benefit)/expense relating to components of other comprehensive (loss)/income | € (31,000,000) | € 147,000,000 | € 0 |
Uncertain tax position liability, expected to be resolved | 0 | ||
Deferred tax on foreign exchange differences | 1,000,000 | 8,000,000 | € 0 |
Deferred tax liability recognized on investment in subsidiaries | 0 | ||
TME | |||
Disclosure Of Income Tax [Line Items] | |||
Deferred tax on foreign exchange differences | € 0 | € 8,000,000 | |
Luxembourg | |||
Disclosure Of Income Tax [Line Items] | |||
Statutory tax rate | 24.94% | 26.01% | 27.08% |
Provisions | |||
Disclosure Of Income Tax [Line Items] | |||
Current income tax expense on uncertain tax positions | € 0 | ||
Uncertain tax position liability | € 1,000,000 |
Income Tax - Summary of Reconci
Income Tax - Summary of Reconciliation Between Reported Tax Expense and Theoretical Tax Expense Loss Before Taxes (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation Of Average Effective Tax Rate And Applicable Tax Rate [Abstract] | |||
Loss before tax | € (131) | € (173) | € (1,233) |
Tax using the Luxembourg tax rate | (33) | (45) | (334) |
Effect of tax rates in foreign jurisdictions | 2 | (11) | (10) |
Permanent differences | 58 | (7) | 15 |
Change in unrecognized deferred taxes | 29 | (43) | 329 |
Deferred tax on foreign exchange differences | 1 | 8 | 0 |
Other | (2) | 3 | 2 |
Income tax expense/(benefit) | € 55 | € (95) | € 2 |
Income Tax - Schedule of Major
Income Tax - Schedule of Major Components of Deferred Tax Assets and Liabilities (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | € 7 | € 6 | € 6 | € 3 |
Intangible Assets | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | (42) | (1) | ||
Share-based Compensation | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | 14 | 6 | ||
Tax Losses Carried Forward | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | 78 | 147 | ||
Property and Equipment | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | 79 | 5 | ||
Unrealized Gains | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | (126) | (154) | ||
Other | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | € 4 | € 3 |
Income Tax - Summary of Recon_2
Income Tax - Summary of Reconciliation of Net Deferred Tax (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation Of Changes In Deferred Tax Liability Asset [Abstract] | |||
At January 1 | € 6 | € 6 | € 3 |
Movement recognized in consolidated statement of operations | (11) | 136 | 5 |
Movement recognized in consolidated statement of changes in equity and other comprehensive income | 18 | (136) | 2 |
Movement due to acquisition | (6) | 0 | (4) |
At December 31 | € 7 | € 6 | € 6 |
Income Tax - Summary of Deferre
Income Tax - Summary of Deferred Tax Reconciliation to Balance Sheet (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets And Liabilities [Abstract] | ||
Deferred tax assets | € 9 | € 8 |
Deferred tax liabilities | € 2 | € 2 |
Income Tax - Summary of Defer_2
Income Tax - Summary of Deferred Tax Assets Unrecognized (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | € 379 | € 276 |
Intangible Assets | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 77 | 72 |
Share-based Compensation | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 58 | 34 |
Tax Losses Carried Forward | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 192 | 148 |
Unrealized Losses | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 3 | 2 |
Other | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | € 49 | € 20 |
Income Tax - Schedule of Tax Lo
Income Tax - Schedule of Tax Loss Carry-forwards Expected To Expire (Details) € in Millions | Dec. 31, 2019EUR (€) |
Tax Losses Carried Forward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | € 1,505 |
Research and Development Credit Carryforward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 16 |
Foreign Tax Credits | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 4 |
2020-2029 | Tax Losses Carried Forward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 0 |
2020-2029 | Research and Development Credit Carryforward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 0 |
2020-2029 | Foreign Tax Credits | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 4 |
2030 and Onwards | Tax Losses Carried Forward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 509 |
2030 and Onwards | Research and Development Credit Carryforward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 16 |
2030 and Onwards | Foreign Tax Credits | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 0 |
Unlimited | Tax Losses Carried Forward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 996 |
Unlimited | Research and Development Credit Carryforward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 0 |
Unlimited | Foreign Tax Credits | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | € 0 |
Loss Per Share - Summary of Com
Loss Per Share - Summary of Computation of Loss Per Share (Details) - EUR (€) € / shares in Units, € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basic loss per share | |||
Net loss attributable to owners of the parent | € (186) | € (78) | € (1,235) |
Weighted-average ordinary shares outstanding | 180,960,579 | 177,154,405 | 151,668,769 |
Basic | € (1.03) | € (0.44) | € (8.14) |
Diluted loss per share | |||
Net loss attributable to owners of the parent | € (186) | € (78) | € (1,235) |
Fair value adjustments on warrants | (14) | ||
Net loss used in the computation of diluted loss per share | € (186) | € (92) | € (1,235) |
Weighted-average ordinary shares outstanding | |||
Weighted-average ordinary shares outstanding | 180,960,579 | 177,154,405 | 151,668,769 |
Warrants | 4,055,887 | ||
Diluted weighted average ordinary shares | 180,960,579 | 181,210,292 | 151,668,769 |
Diluted | € (1.03) | € (0.51) | € (8.14) |
Loss Per Share - Summary of Ant
Loss Per Share - Summary of Anti-dilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Options | |||
Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 12,153,772 | 12,243,526 | 14,646,720 |
Restricted Stock Units | |||
Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 638,350 | 100,383 | 195,937 |
Restricted Stock Awards | |||
Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 41,280 | 61,880 | 61,880 |
Other Contingently Issuable Shares | |||
Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 162,320 | ||
Warrants | |||
Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 2,400,000 | 6,720,000 |
Leases - Summary of Reconciliat
Leases - Summary of Reconciliation of Lease Liabilities Related to Lease Commitments (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Disclosure Of Lease Commitments I F R S16 Leases [Abstract] | |||
Total lease commitments as of December 31, 2018 | € 985 | € 833 | |
Impact of discounting remaining lease payments | 324 | (285) | |
Recognition exemption for short-term leases | (7) | ||
Total lease liabilities included in the consolidated statement of financial position at January 1, 2019 | 629 | 541 | |
Current | 7 | 20 | |
Lease liabilities | € 622 | € 521 | € 0 |
Leases - Additional Information
Leases - Additional Information (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2019 | Jan. 01, 2019 | |
Disclosure Of Leases [Abstract] | ||
Weighted average incremental borrowing rate applied to lease liabilities | 6.70% | |
Expenses relating to short-term leases | € 14 | |
Weighted average incremental borrowing rate applied to lease liabilities | 6.40% |
Leases - Summary of Roll-forwar
Leases - Summary of Roll-forward of Lease Right-of-use Assets (Details) € in Millions | 12 Months Ended |
Dec. 31, 2019EUR (€) | |
Disclosure Of Quantitative Information About Rightofuse Assets [Line Items] | |
Beginning balance | € 0 |
Ending balance | 489 |
Adoption of IFRS 16 | |
Disclosure Of Quantitative Information About Rightofuse Assets [Line Items] | |
Beginning balance | 396 |
Cost | |
Disclosure Of Quantitative Information About Rightofuse Assets [Line Items] | |
Beginning balance | 471 |
Increases | 138 |
Acquired in business combinations | 11 |
Decreases | (39) |
Exchange differences | 6 |
Ending balance | 587 |
Accumulated Depreciation | |
Disclosure Of Quantitative Information About Rightofuse Assets [Line Items] | |
Beginning balance | (75) |
Decreases | 21 |
Exchange differences | (2) |
Ending balance | (98) |
Depreciation charge | € (42) |
Leases - Summary of Maturity An
Leases - Summary of Maturity Analysis of Lease Liabilities (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Disclosure Of Lease Commitments I F R S16 Leases [Line Items] | |||
Total lease commitments | € 985 | € 833 | |
Impact of discounting remaining lease payments | (324) | 285 | |
Lease incentives receivable | (32) | ||
Total lease liabilities | 629 | 541 | |
Lease liabilities included in the consolidated statement of financial position | |||
Current | 7 | 20 | |
Lease liabilities | 622 | 521 | € 0 |
Total lease liabilities included in the consolidated statement of financial position at January 1, 2019 | 629 | € 541 | |
Less Than One Year | |||
Disclosure Of Lease Commitments I F R S16 Leases [Line Items] | |||
Total lease commitments | 79 | ||
One to Five Years | |||
Disclosure Of Lease Commitments I F R S16 Leases [Line Items] | |||
Total lease commitments | 317 | ||
More Than Five Years | |||
Disclosure Of Lease Commitments I F R S16 Leases [Line Items] | |||
Total lease commitments | € 589 |
Leases - Summary of Maturity _2
Leases - Summary of Maturity Analysis of Lease Liabilities (Parenthetical) (Details) € in Millions | Dec. 31, 2019EUR (€) |
Disclosure Of Maturity Analysis Of IFRS 16 Lease Payments [Abstract] | |
Lease commitment amount for short-term lease not commenced | € 19 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Detail) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | € 197 | |
Impairment charge | (6) | |
Ending Balance | 291 | € 197 |
Cost | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | 277 | 178 |
Additions | 126 | 145 |
Acquired in business combinations | 6 | |
Disposals | (67) | (47) |
Exchange differences | 7 | 1 |
Ending Balance | 349 | 277 |
Accumulated Depreciation | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | (80) | (105) |
Depreciation charge | (29) | (21) |
Impairment charge | (6) | |
Disposals | 58 | 45 |
Exchange differences | (1) | 1 |
Ending Balance | (58) | (80) |
Property and Equipment | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | 11 | |
Ending Balance | 25 | 11 |
Property and Equipment | Cost | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | 61 | 105 |
Additions | 20 | 3 |
Acquired in business combinations | 1 | |
Disposals | (29) | (46) |
Exchange differences | 1 | (1) |
Ending Balance | 54 | 61 |
Property and Equipment | Accumulated Depreciation | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | (50) | (84) |
Depreciation charge | (8) | (12) |
Disposals | 30 | 45 |
Exchange differences | (1) | 1 |
Ending Balance | (29) | (50) |
Leasehold Improvements | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | 186 | |
Ending Balance | 266 | 186 |
Leasehold Improvements | Cost | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | 216 | 73 |
Additions | 106 | 142 |
Acquired in business combinations | 5 | |
Disposals | (38) | (1) |
Exchange differences | 6 | 2 |
Ending Balance | 295 | 216 |
Leasehold Improvements | Accumulated Depreciation | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | (30) | (21) |
Depreciation charge | (21) | (9) |
Impairment charge | (6) | |
Disposals | 28 | |
Ending Balance | € (29) | € (30) |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Property Plant And Equipment [Abstract] | ||
Impairment charge on leasehold improvements | € 6 | |
Leasehold improvements not placed into service | € 15 | € 100 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary of Goodwill and Intangible Assets (Detail) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | € 28 | |
Exchange differences | 1 | |
Ending balance, intangible assets | 58 | € 28 |
Beginning balance | 174 | |
Ending balance | 536 | 174 |
Goodwill | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance | 146 | |
Ending balance | 478 | 146 |
Cost | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | 47 | 35 |
Additions | 19 | 8 |
Acquisition, business combination (Note 5) | 27 | 3 |
Amortization charge | 0 | |
Exchange differences | (1) | 1 |
Ending balance, intangible assets | 92 | 47 |
Beginning balance | 193 | 170 |
Additions | 19 | 8 |
Acquisition, business combination (Note 5) | 355 | 11 |
Exchange differences | 3 | 4 |
Ending balance | 570 | 193 |
Cost | Goodwill | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance | 146 | 135 |
Additions | 0 | 0 |
Acquisition, business combination (Note 5) | 328 | 8 |
Exchange differences | 4 | 3 |
Ending balance | 478 | 146 |
Accumulated Depreciation | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | (19) | (8) |
Amortization charge | (16) | (11) |
Exchange differences | 1 | |
Ending balance, intangible assets | (34) | (19) |
Beginning balance | (19) | (8) |
Ending balance | (34) | (19) |
Internal development costs and patents | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | 14 | |
Ending balance, intangible assets | 26 | 14 |
Internal development costs and patents | Cost | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | 26 | 18 |
Additions | 19 | 8 |
Acquisition, business combination (Note 5) | 0 | 0 |
Amortization charge | 0 | |
Exchange differences | 0 | 0 |
Ending balance, intangible assets | 45 | 26 |
Internal development costs and patents | Accumulated Depreciation | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | (12) | (6) |
Amortization charge | (7) | (6) |
Exchange differences | 0 | |
Ending balance, intangible assets | (19) | (12) |
Acquired intangible assets | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | 14 | |
Ending balance, intangible assets | 32 | 14 |
Acquired intangible assets | Cost | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | 21 | 17 |
Additions | 0 | 0 |
Acquisition, business combination (Note 5) | 27 | 3 |
Amortization charge | 0 | |
Exchange differences | (1) | 1 |
Ending balance, intangible assets | 47 | 21 |
Acquired intangible assets | Accumulated Depreciation | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | (7) | (2) |
Amortization charge | (9) | (5) |
Exchange differences | 1 | |
Ending balance, intangible assets | € (15) | € (7) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) € in Millions | 12 Months Ended | ||
Dec. 31, 2019EUR (€)Segment | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | |
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Amortization included in research and development | € | € 14 | € 11 | € 8 |
Number of operating segments | Segment | 2 | ||
Discount rate | 13.00% | ||
Revenue multiple used to estimate enterprise value | 3 | ||
Bottom of Range | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Discount rate | 13.00% | ||
Revenue multiple used to estimate enterprise value | 2.2 | ||
Top of Range | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Discount rate | 19.50% | ||
Revenue multiple used to estimate enterprise value | 4.6 | ||
Income and Market Approaches | Premium | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Percentage of weightings | 50.00% | ||
Income and Market Approaches | Ad-Supported | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Percentage of weightings | 50.00% | ||
Income Approach | Premium | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Discount rate | 7.50% | ||
Income Approach | Ad-Supported | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Discount rate | 9.00% | ||
Market Approach | Bottom of Range | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Revenue multiple used to estimate enterprise value | 2.5 | ||
Market Approach | Top of Range | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Revenue multiple used to estimate enterprise value | 3.5 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Carrying Amount of Goodwill Allocated to Each of the Operating Segments (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | ||
Goodwill | € 478 | € 146 |
Premium | ||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | ||
Goodwill | 130 | 128 |
Ad-Supported | ||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | ||
Goodwill | € 348 | € 18 |
Restricted Cash and Other Non_3
Restricted Cash and Other Non-current Assets - Summary of Restricted Cash and Other Non-current Assets (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Restricted cash | ||
Lease deposits and guarantees | € 54 | € 52 |
Other | 1 | 3 |
Other non-current assets | 14 | 10 |
Restricted cash and other non-current assets | € 69 | € 65 |
Trade and Other Receivables - S
Trade and Other Receivables - Summary of Trade and Other Receivables (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Trade And Other Receivables [Abstract] | ||
Trade receivables | € 305 | € 286 |
Less: allowance for expected credit losses | (5) | (8) |
Less: provision for credit reserves | (3) | (5) |
Trade receivables – net | 297 | 273 |
Other | 105 | 127 |
Trade and other receivables | € 402 | € 400 |
Trade and Other Receivables -_2
Trade and Other Receivables - Summary of Aging of Group's Net Trade Receivables (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | € 297 | € 273 |
Financial Assets Past Due but Not Impaired | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 297 | 273 |
Financial Assets Past Due but Not Impaired | Current | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 209 | 195 |
Financial Assets Past Due but Not Impaired | Overdue 1 – 30 Days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 51 | 44 |
Financial Assets Past Due but Not Impaired | Overdue 31 - 60 Days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 19 | 19 |
Financial Assets Past Due but Not Impaired | Overdue 60 – 90 Days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 10 | 7 |
Financial Assets Past Due but Not Impaired | Overdue More than 90 Days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | € 8 | € 8 |
Trade and Other Receivables -_3
Trade and Other Receivables - Summary of Movements in Group's Allowance for Expected Credit Losses (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Trade And Other Receivables [Line Items] | ||
Beginning balance | € 8 | |
Ending balance | 5 | € 8 |
Trade Receivables | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Beginning balance | 8 | 15 |
Provision for expected credit losses | 12 | 15 |
Reversal of unutilized provisions | (12) | (18) |
Receivables written off | (3) | (4) |
Ending balance | € 5 | € 8 |
Issued Share Capital and Othe_3
Issued Share Capital and Other Reserves - Additional Information (Details) | Oct. 17, 2019shares | Oct. 04, 2019EUR (€)shares | Jul. 01, 2019EUR (€)shares | Jul. 01, 2019$ / shares | Nov. 05, 2018EUR (€)shares | Nov. 05, 2018USD ($)shares | Apr. 03, 2018EUR (€) | Feb. 16, 2018Beneficiary_Certificate | Dec. 29, 2017USD ($)shares | Dec. 15, 2017USD ($) | Jul. 13, 2017EUR (€)shares | Jul. 13, 2017$ / shares | Oct. 17, 2016EUR (€)shares | Oct. 17, 2016$ / shares | Jan. 17, 2014EUR (€)shares | Dec. 19, 2013EUR (€)shares | Nov. 13, 2012EUR (€)shares | Jan. 31, 2018USD ($)shares | Dec. 31, 2013EUR (€) | Dec. 31, 2012EUR (€) | Dec. 31, 2019EUR (€)Beneficiary_Certificate€ / sharesshares | Dec. 31, 2018EUR (€)Beneficiary_Certificate€ / sharesshares | Dec. 31, 2017EUR (€)€ / sharesshares | Dec. 31, 2019EUR (€)Beneficiary_Certificate€ / sharesshares | Dec. 31, 2019USD ($)Beneficiary_Certificateshares | Mar. 07, 2018shares | Jan. 01, 2018shares | Dec. 15, 2017EUR (€)shares | Nov. 20, 2013shares |
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Authorized and subscribed shares | 403,032,520 | 403,032,520 | 403,001,760 | 403,032,520 | 403,032,520 | ||||||||||||||||||||||||
Authorized and subscribed shares, par value | € / shares | € 0.000625 | € 0.000625 | € 0.000625 | € 0.000625 | |||||||||||||||||||||||||
Ordinary shares issued | 1,991,627 | 1,600,000 | 1,754,960 | 4,204,120 | 9,431,960 | 9,431,960 | 4,800,000 | 8,233,160 | |||||||||||||||||||||
Gross proceeds from issuance of ordinary shares | € | € 79,000,000 | ||||||||||||||||||||||||||||
Transaction costs incurred | € | € 3,000,000 | ||||||||||||||||||||||||||||
Contingent options recognized as derivative liability | € | € 31,000,000 | € 39,000,000 | |||||||||||||||||||||||||||
Number of warrants exercised | 1,600,000 | ||||||||||||||||||||||||||||
Number of warrants effectively net settled | 3,520,000 | ||||||||||||||||||||||||||||
Proceeds from exercise of warrants | € | € 74,000,000 | € 74,000,000 | € 0 | € 0 | |||||||||||||||||||||||||
Long term investments | € | € 1,497,000,000 | € 1,646,000,000 | € 1,497,000,000 | ||||||||||||||||||||||||||
Convertible notes exchanged principal amount | $ | $ 110,000,000 | $ 301,000,000 | $ 628,000,000 | ||||||||||||||||||||||||||
Number of beneficiary certificates issued per share | Beneficiary_Certificate | 10 | ||||||||||||||||||||||||||||
Convertible notes | € | € 1,100,000,000 | ||||||||||||||||||||||||||||
Ordinary shares authorized to be repurchased | 10,000,000 | 10,000,000 | |||||||||||||||||||||||||||
Number of ordinary shares repurchased | 3,679,156 | 6,427,271 | |||||||||||||||||||||||||||
Share repurchase program expiry date | Apr. 21, 2021 | Apr. 21, 2021 | Apr. 21, 2021 | ||||||||||||||||||||||||||
Warrants expiry date | Jul. 1, 2022 | ||||||||||||||||||||||||||||
Dividends recognised as distributions to owners | € | € 0 | ||||||||||||||||||||||||||||
Number of treasury shares reissued | 3,557,405 | 3,382,312 | |||||||||||||||||||||||||||
Number of ordinary shares held as treasury shares | 3,166,710 | 3,044,959 | 3,166,710 | 3,166,710 | |||||||||||||||||||||||||
Number of beneficiary certificates held by founders | Beneficiary_Certificate | 378,201,910 | 364,785,640 | 378,201,910 | 378,201,910 | |||||||||||||||||||||||||
November 5, 2018 Program | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Number of ordinary shares repurchased | 4,366,427 | ||||||||||||||||||||||||||||
Approved share repurchase amount | € | € 510,000,000 | ||||||||||||||||||||||||||||
Top of Range | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Ordinary shares authorized to be repurchased | 10,000,000 | 10,000,000 | |||||||||||||||||||||||||||
Approved share repurchase amount | € 1,000,000,000 | $ 1,000,000,000 | |||||||||||||||||||||||||||
Spotify Netherlands B.V. | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Ordinary shares issued | 5,740,000 | ||||||||||||||||||||||||||||
Certain Members of Key Management | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Ordinary shares issued | 1,991,627 | 1,600,000 | |||||||||||||||||||||||||||
Proceeds from warrants issued | € | € 15,000,000 | € 27,000,000 | |||||||||||||||||||||||||||
Number of ordinary shares that can be acquired from warrants issued | 800,000 | 5,120,000 | |||||||||||||||||||||||||||
Exercise price of each warrant | $ / shares | $ 190.09 | $ 50.61 | |||||||||||||||||||||||||||
Exercise price of each warrant to fair market value of ordinary shares on date of issuance | 130.00% | 120.00% | |||||||||||||||||||||||||||
Number of warrants exercised | 1,600,000 | ||||||||||||||||||||||||||||
Number of warrants effectively net settled | 3,520,000 | ||||||||||||||||||||||||||||
Proceeds from exercise of warrants | € | € 74,000,000 | ||||||||||||||||||||||||||||
Warrants expiry date | Jul. 1, 2022 | ||||||||||||||||||||||||||||
Employee and Member of Management of Group | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Proceeds from warrants issued | € | € 15,000,000 | € 9,000,000 | |||||||||||||||||||||||||||
Number of ordinary shares that can be acquired from warrants issued | 800,000 | 1,600,000 | |||||||||||||||||||||||||||
Exercise price of each warrant | $ / shares | $ 190.09 | $ 89.73 | |||||||||||||||||||||||||||
Exercise price of each warrant to fair market value of ordinary shares on date of issuance | 130.00% | 130.00% | |||||||||||||||||||||||||||
Warrants expiry | 2020-07 | ||||||||||||||||||||||||||||
Warrants expiry date | Jul. 1, 2022 | ||||||||||||||||||||||||||||
TME | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Ordinary shares issued | 8,552,440 | ||||||||||||||||||||||||||||
Long term investments | € | € 1,481,000,000 | € 1,630,000,000 | € 910,000,000 | € 1,481,000,000 | € 910,000,000 | ||||||||||||||||||||||||
Transfer restrictions period | 3 years | ||||||||||||||||||||||||||||
First Closing | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Ordinary shares issued | 5,584,160 | ||||||||||||||||||||||||||||
Gross proceeds from issuance of ordinary shares | € | € 123,000,000 | ||||||||||||||||||||||||||||
Transaction costs incurred | € | € 2,000,000 | ||||||||||||||||||||||||||||
Second Closing | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Ordinary shares issued | 2,649,000 | ||||||||||||||||||||||||||||
Gross proceeds from issuance of ordinary shares | € | € 58,000,000 | ||||||||||||||||||||||||||||
April 17, June 9, and July 15, 2015 | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Ordinary shares issued | 9,484,880 | 9,484,880 | 9,484,880 | ||||||||||||||||||||||||||
Gross proceeds from issuance of ordinary shares | € | € 479,000,000 | ||||||||||||||||||||||||||||
Transaction costs incurred | € | 5,000,000 | ||||||||||||||||||||||||||||
Contingent options recognized as derivative liability | € | € 87,000,000 | ||||||||||||||||||||||||||||
December 15 and 29, 2017 | Convertible Notes | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Ordinary shares issued | 6,554,960 | 6,554,960 | 6,554,960 | ||||||||||||||||||||||||||
Debt principal amount | $ | $ 411,000,000 | ||||||||||||||||||||||||||||
Accrued interest | $ | $ 37,000,000 | ||||||||||||||||||||||||||||
Number of Ordinary Shares Outstanding | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Number of shares issued and fully paid | 187,492,667 | 183,901,040 | 167,258,400 | 187,492,667 | 187,492,667 | ||||||||||||||||||||||||
Number of ordinary shares repurchased | 3,679,156 | 6,427,271 | |||||||||||||||||||||||||||
Other Paid in Capital | December 15 and 29, 2017 | Convertible Notes | |||||||||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | |||||||||||||||||||||||||||||
Convertible notes | € | € 1,100,000,000 |
Issued Share Capital and Othe_4
Issued Share Capital and Other Reserves - Summary of Other Reserves (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Currency translation | |||
Currency translation, beginning balance | € (15) | € (7) | € (4) |
Currency translation | 4 | (6) | (3) |
Gains reclassified to consolidated statement of operations | 0 | (2) | 0 |
Currency translation, ending balance | (11) | (15) | (7) |
Short term and long term investments | |||
Gains/(losses) on fair value that may be subsequently reclassified to consolidated statement of operations | 7 | (2) | (2) |
Cash flow hedges | |||
Cash flow hedges, beginning balance | (1) | 0 | 0 |
(Losses)/gains on fair value that may be subsequently reclassified to consolidated statement of operations | (7) | 1 | 0 |
Losses/(gains) reclassified to revenue | 10 | (5) | 0 |
(Gains)/losses reclassified to cost of revenue | (7) | 3 | 0 |
Deferred tax | 1 | 0 | 0 |
Cash flow hedges, ending balance | (4) | (1) | 0 |
Share-based payments | |||
Share-based payments, beginning balance | 334 | 200 | 130 |
Share-based payments | 127 | 88 | 67 |
Income tax impact associated with share-based payments | 26 | 48 | 3 |
Issuance of share-based payments in conjunction with business combinations | 13 | 0 | 0 |
Restricted stock units withheld for employee taxes | (6) | (2) | 0 |
Share-based payments,ending balance | 494 | 334 | 200 |
Other reserves, ending balance | 924 | 875 | 177 |
Reserve of gains and losses on financial assets measured at fair value through other comprehensive income | |||
Short term and long term investments | |||
Investments, beginning balance | (4) | (5) | (4) |
Losses reclassified to consolidated statement of operations | 0 | 2 | 1 |
Deferred tax | (2) | 1 | 0 |
Investments, ending balance | 1 | (4) | (5) |
Reserve of gains and losses from investments in equity instruments | |||
Short term and long term investments | |||
Investments, beginning balance | 561 | (11) | 0 |
Gains/(losses) on fair value that may be subsequently reclassified to consolidated statement of operations | (149) | 720 | (11) |
Investments, ending balance | 444 | 561 | (11) |
Deferred tax | € 32 | € (148) | € 0 |
Share-based Payments - Addition
Share-based Payments - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2014 | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2015 | |
Disclosure Of Share Based Payments [Line Items] | |||||
Weighted-average contractual life for stock options outstanding | 2 years 10 months 24 days | 2 years 10 months 24 days | 3 years 3 months 18 days | ||
Weighted-average share price at exercise for options exercised | $ | $ 141.82 | $ 152.33 | $ 57.53 | ||
weighted-average fair value of options granted | $ | $ 34.63 | $ 39.23 | $ 18.05 | ||
Increase decrease in expected volatility rate | 10.00% | ||||
Increase decrease in expected life | one year | ||||
Employee Stock Option Plans ("ESOP") | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Description of share based payment | Under the Employee Stock Option Plans (“ESOP”), stock options of the Company are granted to executives and certain employees of the Group. For options granted prior to January 1, 2016, the exercise price is equal to the fair value of the shares on grant date for employees in the United States and for U.S. citizens and fair value less 30% for the rest of the world. The value of the discount is included in the grant date fair value of the award. For options granted thereafter under these ESOP plans, the exercise price of the options is equal to the fair value of the shares on grant date for all employees. Generally, the first vesting period (13.5% – 25% of the initial grant) is up to one year from the grant date and subsequently vests at a rate of 6.25% each quarter until fully vested. The exercise price for options is payable in the EUR value of a fixed USD amount; therefore, the Group considers these awards to be USD-denominated. The options are generally granted with a term of five years. During 2019, the Company implemented a new ESOP and Director Stock Option Plan, under which stock options of the Company are granted to executives and employees of the Group and to members of the Company’s Board of Directors, respectively. For options granted under the 2019 plans, the exercise price is equal to the fair value of the ordinary shares on grant date or equal to 150% of the fair value of the ordinary shares on grant date. The exercise price is included in the grant date fair value of the award. The options granted to participants under the 2019 programs have a first vesting period of three or eight months from date of grant and vest monthly or annually thereafter until fully vested. The options are granted with a term of five years. | ||||
Description of share based payments award, options exercise price | the exercise price is equal to the fair value of the shares on grant date for employees in the United States and for U.S. citizens and fair value less 30% for the rest of the world. | ||||
Options granted period | 5 years | ||||
Employee Stock Option Plans ("ESOP") | 2019 Plans | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Options granted period | 5 years | ||||
Percentage of fair value of ordinary shares | 150.00% | ||||
Employee Stock Option Plans ("ESOP") | Vesting Tranche After First Vesting Period | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting percentage | 6.25% | ||||
Employee Stock Option Plans ("ESOP") | Bottom of Range | 2019 Plans | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting period | 3 months | ||||
Employee Stock Option Plans ("ESOP") | Bottom of Range | First Vesting Period | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting percentage | 13.50% | ||||
Employee Stock Option Plans ("ESOP") | Top of Range | 2019 Plans | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting period | 8 months | ||||
Employee Stock Option Plans ("ESOP") | Top of Range | First Vesting Period | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting percentage | 25.00% | ||||
Restricted Stock Units | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Number of shares granted | 715,224 | 14,383 | 80,920 | ||
Restricted Stock Units | 2019 Plans | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting period | 4 years | ||||
Restricted Stock Units | Bottom of Range | 2019 Plans | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting period | 3 months | ||||
Restricted Stock Units | Top of Range | 2019 Plans | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting period | 8 months | ||||
Other Contingently Issuable Shares | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Number of shares granted | 162,320 | 0 | 0 | ||
Other Contingently Issuable Shares | Anchor | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting period | 4 years | ||||
Number of shares granted | 162,320 | ||||
Grant date fair value of each equity instrument | $ | $ 145.21 | ||||
Restricted Stock Awards | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Number of shares granted | 0 | 0 | 61,880 | ||
Restricted Stock Awards | 2017 Acquiree | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Number of shares issued | 61,880 | ||||
Restricted Stock Awards | Bottom of Range | 2017 Acquiree | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting period | 2 years | ||||
Restricted Stock Awards | Top of Range | 2017 Acquiree | |||||
Disclosure Of Share Based Payments [Line Items] | |||||
Vesting period | 3 years |
Share-based Payments - Schedule
Share-based Payments - Schedule of Activities in RSUs, RSAs and Other Contingently Issuable Shares Outstanding and Related Information (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | |
Restricted Stock Units | |||
Disclosure Of Share Based Payments [Line Items] | |||
Number of Instruments, Beginning balance | shares | 100,383 | 195,937 | 501,480 |
Instruments Granted | shares | 715,224 | 14,383 | 80,920 |
Instruments Forfeited | shares | (48,754) | (15,991) | (85,903) |
Instruments Released | shares | (128,503) | (93,946) | (300,560) |
Number of Instruments, Ending balance | shares | 638,350 | 100,383 | 195,937 |
Weighted average grant date fair value, Beginning balance | $ | $ 63.87 | $ 42.46 | $ 36.73 |
Weighted average grant date fair value, Granted | $ | 137.15 | 168.24 | 59.63 |
Weighted average grant date fair value, Forfeited | $ | 118.96 | 34.93 | 37.43 |
Weighted average grant date fair value, Released | $ | 98.52 | 40.12 | 38.95 |
Weighted average grant date fair value, Ending balance | $ | $ 134.79 | $ 63.87 | $ 42.46 |
Restricted Stock Awards | |||
Disclosure Of Share Based Payments [Line Items] | |||
Number of Instruments, Beginning balance | shares | 61,880 | 61,880 | 0 |
Instruments Granted | shares | 0 | 0 | 61,880 |
Instruments Forfeited | shares | 0 | 0 | 0 |
Instruments Released | shares | (20,600) | 0 | 0 |
Number of Instruments, Ending balance | shares | 41,280 | 61,880 | 61,880 |
Weighted average grant date fair value, Beginning balance | $ | $ 90.65 | $ 90.65 | $ 0 |
Weighted average grant date fair value, Granted | $ | 0 | 0 | 90.65 |
Weighted average grant date fair value, Forfeited | $ | 0 | 0 | 0 |
Weighted average grant date fair value, Released | $ | 90.65 | 0 | 0 |
Weighted average grant date fair value, Ending balance | $ | $ 90.65 | $ 90.65 | $ 90.65 |
Other | |||
Disclosure Of Share Based Payments [Line Items] | |||
Number of Instruments, Beginning balance | shares | 0 | 0 | 0 |
Instruments Granted | shares | 162,320 | 0 | 0 |
Instruments Forfeited | shares | 0 | 0 | 0 |
Instruments Released | shares | 0 | 0 | 0 |
Number of Instruments, Ending balance | shares | 162,320 | 0 | 0 |
Weighted average grant date fair value, Beginning balance | $ | $ 0 | $ 0 | $ 0 |
Weighted average grant date fair value, Granted | $ | 145.21 | 0 | 0 |
Weighted average grant date fair value, Forfeited | $ | 0 | 0 | 0 |
Weighted average grant date fair value, Released | $ | 0 | 0 | 0 |
Weighted average grant date fair value, Ending balance | $ | $ 134.15 | $ 0 | $ 0 |
Share-based Payments - Schedu_2
Share-based Payments - Schedule of Activity in Stock Options Outstanding and Related Information (Details) | 12 Months Ended | ||
Dec. 31, 2019shares$ / shares | Dec. 31, 2018shares$ / shares | Dec. 31, 2017shares$ / shares | |
Disclosure Of Share Based Payments [Abstract] | |||
Number of options outstanding, beginning balance | shares | 12,243,526 | 14,646,720 | 10,976,480 |
Number of options granted | shares | 4,152,565 | 3,578,000 | 5,819,520 |
Number of options forfeited | shares | (719,860) | (1,220,508) | (659,000) |
Number of options exercised | shares | (3,478,660) | (4,736,555) | (1,422,520) |
Number of options expired | shares | (43,799) | (24,131) | (67,760) |
Number of options outstanding, ending balance | shares | 12,153,772 | 12,243,526 | 14,646,720 |
Number of options, Exercisable | shares | 5,553,650 | 5,162,876 | 5,822,400 |
Weighted average exercise price outstanding, beginning balance | $ / shares | $ 77.63 | $ 48.73 | $ 36.88 |
Weighted average exercise price granted | $ / shares | 147.11 | 142.20 | 64.11 |
Weighted average exercise price forfeited | $ / shares | 105.01 | 62.82 | 46.34 |
Weighted average exercise price exercised | $ / shares | 49.41 | 40.97 | 22.23 |
Weighted average exercise price expired | $ / shares | 117.79 | 54.98 | 28.49 |
Weighted average exercise price outstanding, ending balance | $ / shares | 107.68 | 77.63 | 48.73 |
Weighted average exercise price, Exercisable | $ / shares | $ 84.18 | $ 58.25 | $ 39.62 |
Share-based Payments - Summary
Share-based Payments - Summary of Stock Options Outstanding (Detail) - shares | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | 12,153,772 | 12,243,526 | 14,646,720 | 10,976,480 |
Weighted average remaining contractual life (years) | 2 years 10 months 24 days | 2 years 10 months 24 days | 3 years 3 months 18 days | |
1.65 to 45.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | 2,130,161 | 4,753,052 | 9,039,248 | |
Weighted average remaining contractual life (years) | 10 months 24 days | 1 year 9 months 18 days | 2 years 8 months 12 days | |
45.01 to 90.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | 2,482,270 | 3,337,414 | 4,736,432 | |
Weighted average remaining contractual life (years) | 2 years 2 months 12 days | 3 years 2 months 12 days | 4 years 2 months 12 days | |
90.01 to 135.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | 2,946,838 | 2,695,890 | 871,040 | |
Weighted average remaining contractual life (years) | 3 years 4 months 24 days | 3 years 10 months 24 days | 4 years 2 months 12 days | |
135.01 to 180.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | 3,318,423 | 749,360 | ||
Weighted average remaining contractual life (years) | 4 years 1 month 6 days | 4 years 3 months 18 days | 0 years | |
180.01 to 233.42 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | 1,276,080 | 707,810 | ||
Weighted average remaining contractual life (years) | 3 years 8 months 12 days | 4 years 2 months 12 days | 0 years |
Share-based Payments - Summar_2
Share-based Payments - Summary of Stock Options Outstanding (Parenthetical) (Detail) | Dec. 31, 2019$ / shares |
Bottom of Range | 1.65 to 45.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | $ 1.65 |
Bottom of Range | 45.01 to 90.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 45.01 |
Bottom of Range | 90.01 to 135.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 90.01 |
Bottom of Range | 135.01 to 180.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 135.01 |
Bottom of Range | 180.01 to 233.42 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 180.01 |
Top of Range | 1.65 to 45.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 45 |
Top of Range | 45.01 to 90.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 90 |
Top of Range | 90.01 to 135.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 135 |
Top of Range | 135.01 to 180.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 180 |
Top of Range | 180.01 to 233.42 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | $ 233.42 |
Share-based Payments - Summar_3
Share-based Payments - Summary of Black-Scholes Option-Pricing Models (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Share Based Payments [Line Items] | |||
Weighted-average share price (US$) | $ 136.09 | $ 142.20 | $ 64.11 |
Bottom of Range | |||
Disclosure Of Share Based Payments [Line Items] | |||
Expected volatility (%) | 30.10% | 32.00% | 32.00% |
Risk-free interest rate (%) | 1.40% | 2.40% | 1.40% |
Expected life of stock options (years) | 2 years 6 months | 2 years 4 months 24 days | 2 years 4 months 24 days |
Top of Range | |||
Disclosure Of Share Based Payments [Line Items] | |||
Expected volatility (%) | 35.20% | 34.70% | 43.50% |
Risk-free interest rate (%) | 2.60% | 2.90% | 2.00% |
Expected life of stock options (years) | 4 years 8 months 12 days | 4 years 4 months 24 days | 4 years 4 months 24 days |
Share-based Payments - Summar_4
Share-based Payments - Summary of Impact of Changes on Stock Options Expense for Options Granted (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Share Based Payments [Line Items] | |||
Share-based payments | € 122 | € 88 | € 65 |
Volatility Decreased by 10% | |||
Stock option expense increase (decrease) under the following assumption changes | |||
Volatility increase (decrease) by 10% | (13) | ||
Volatility Increase by 10% | |||
Stock option expense increase (decrease) under the following assumption changes | |||
Volatility increase (decrease) by 10% | 13 | ||
Expected Life Decrease by 1 Year | |||
Stock option expense increase (decrease) under the following assumption changes | |||
Expected life decrease by 1 year | (9) | ||
Expected Life Increase by 1 Year | |||
Stock option expense increase (decrease) under the following assumption changes | |||
Expected life decrease by 1 year | 8 | ||
Options Granted in 2018 | |||
Disclosure Of Share Based Payments [Line Items] | |||
Share-based payments | € 48 |
Share-based Payments - Summar_5
Share-based Payments - Summary of Expense Recognized in Consolidated Statement of Operations for Employee Share Based Payments (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Share Based Payments [Line Items] | |||
Cost of revenue | € 5,042 | € 3,906 | € 3,241 |
Research and development | 615 | 493 | 396 |
Sales and marketing | 826 | 620 | 567 |
General and administrative | 354 | 283 | 264 |
Expense From Sharebased Payment Transactions With Employees | 122 | 88 | 65 |
Employee Share-based Payments | |||
Disclosure Of Share Based Payments [Line Items] | |||
Cost of revenue | 4 | 3 | 2 |
Research and development | 61 | 40 | 21 |
Sales and marketing | 27 | 19 | 15 |
General and administrative | 30 | 26 | 27 |
Expense From Sharebased Payment Transactions With Employees | € 122 | € 88 | € 65 |
Convertible Notes and Borrowi_2
Convertible Notes and Borrowings - Additional Information (Details) € in Millions, $ in Millions | Apr. 03, 2018EUR (€) | Dec. 29, 2017USD ($)shares | Dec. 15, 2017USD ($)shares | Apr. 01, 2016USD ($) | Jan. 31, 2018USD ($)shares | Dec. 31, 2019USD ($) | Oct. 17, 2019shares | Oct. 04, 2019shares | Jan. 01, 2018shares | Nov. 20, 2013shares | Nov. 13, 2012shares |
Disclosure Of Convertible Notes And Borrowings [Abstract] | |||||||||||
Principal amount of convertible notes | $ 1,000 | ||||||||||
Convertible notes due | 2021 | ||||||||||
Convertible note interest rate | 5.00% | ||||||||||
Increase in Payment-in-kind interest rate basis | 1.00% | ||||||||||
Discount on conversion price per share | 20.00% | ||||||||||
Date of involuntary conversion event | 12 months | ||||||||||
Increase in discount rate | 2.50% | ||||||||||
Principal amount annualized return | 10.00% | ||||||||||
Transaction costs expensed in finance costs | $ 20 | ||||||||||
Convertible notes exchanged principal amount | $ 110 | $ 301 | $ 628 | ||||||||
Convertible notes accrued interest | $ 10 | $ 27 | |||||||||
Ordinary shares issued | shares | 1,754,960 | 4,800,000 | 9,431,960 | 1,991,627 | 1,600,000 | 9,431,960 | 8,233,160 | 4,204,120 | |||
Fair value of ordinary shares at exchange | $ 211 | $ 600 | |||||||||
Fair value adjusted finance cost | € | € 123 | ||||||||||
Issuance of shares upon exchange of Convertible Notes | € | € 1,100 |
Trade and Other Payables - Summ
Trade and Other Payables - Summary of Trade and Other Payables (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Trade And Other Payables [Abstract] | ||
Trade payables | € 377 | € 295 |
Value added tax and sales taxes payable | 148 | 118 |
Other current liabilities | 24 | 14 |
Trade and other payables | € 549 | € 427 |
Trade and Other Payables - Addi
Trade and Other Payables - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Trade And Other Payables [Abstract] | |
Trade payables term | 30 days |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Summary of Accrued Expenses and Other Liabilities (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Non-current | ||
Deferred rent | € 85 | |
Other accrued liabilities | € 20 | 0 |
Accrued expenses and other liabilities non current | 20 | 85 |
Current | ||
Accrued fees to rights holders | 1,153 | 832 |
Accrued salaries, vacation, and related taxes | 54 | 41 |
Accrued social costs for options and RSUs | 64 | 64 |
Other accrued expenses | 167 | 139 |
Accrued expenses and other liabilities current | 1,438 | 1,076 |
Accrued expenses and other liabilities | € 1,458 | € 1,161 |
Accrued Expenses and Other Li_4
Accrued Expenses and Other Liabilities - Additional Information (Details) € in Millions | 12 Months Ended |
Dec. 31, 2018EUR (€) | |
Disclosure Of Accrued Expenses And Other Liabilities [Abstract] | |
Accrual for fees to rights holders | € 12 |
Provisions - Summary of Changes
Provisions - Summary of Changes in Groups Provisions (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Other Provisions [Line Items] | ||
Beginning balance ,Carrying amount | € 48 | € 65 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 16 | 5 |
Reversal of unutilized amounts | (3) | |
Exchange differences | 2 | 3 |
Utilized | (48) | (25) |
Ending balance ,Carrying amount | 15 | 48 |
Current portion | 13 | 42 |
Non-current portion | 2 | 6 |
Legal Contingencies | ||
Disclosure Of Other Provisions [Line Items] | ||
Beginning balance ,Carrying amount | 39 | 53 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 11 | 0 |
Reversal of unutilized amounts | 0 | |
Exchange differences | 2 | 3 |
Utilized | (47) | (17) |
Ending balance ,Carrying amount | 5 | 39 |
Current portion | 5 | 39 |
Non-current portion | 0 | 0 |
Other Provisions | ||
Disclosure Of Other Provisions [Line Items] | ||
Beginning balance ,Carrying amount | 9 | 12 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 5 | 5 |
Reversal of unutilized amounts | (3) | |
Exchange differences | 0 | 0 |
Utilized | (1) | (8) |
Ending balance ,Carrying amount | 10 | 9 |
Current portion | 8 | 3 |
Non-current portion | € 2 | € 6 |
Provisions - Additional Informa
Provisions - Additional Information (Details) | 1 Months Ended | 12 Months Ended |
May 31, 2017USD ($) | Dec. 31, 2019USD ($)Lawsuit | |
Disclosure Of Other Provisions [Line Items] | ||
Cash payment for litigation settlment | $ 43,000,000 | |
Class Counsels Attorneys Fees | 5,000,000 | |
Number of lawsuits on alleging unlawful practices | Lawsuit | 6 | |
Provision sought for award of damages per work infringed | $ 150,000 | |
Bottom Of Range | ||
Disclosure Of Other Provisions [Line Items] | ||
Litigation settlement administration and notice costs | 1,000,000 | |
Top of Range | ||
Disclosure Of Other Provisions [Line Items] | ||
Litigation settlement administration and notice costs | $ 2,000,000 |
Financial Risk Management and_3
Financial Risk Management and Financial Instruments - Additional Information (Details) £ in Millions, kr in Millions, kr in Millions, $ in Millions, $ in Millions | Oct. 17, 2019shares | Oct. 04, 2019EUR (€)shares | Jul. 01, 2019EUR (€)shares | Apr. 01, 2019EUR (€) | Nov. 05, 2018EUR (€)shares | Nov. 05, 2018USD ($)shares | Apr. 03, 2018EUR (€) | Jul. 13, 2017EUR (€)shares | Oct. 17, 2016EUR (€)shares | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2019SEK (kr) | Dec. 31, 2019AUD ($) | Dec. 31, 2019GBP (£) | Dec. 31, 2019CAD ($) | Dec. 31, 2019NOK (kr) | Dec. 31, 2018USD ($) | Dec. 31, 2018SEK (kr) | Dec. 31, 2018AUD ($) | Dec. 31, 2018GBP (£) | Jan. 31, 2018shares | Jan. 01, 2018shares | Dec. 29, 2017shares | Dec. 15, 2017shares | Nov. 20, 2013shares | Nov. 13, 2012shares |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Ordinary shares authorized to be repurchased | shares | 10,000,000 | 10,000,000 | ||||||||||||||||||||||||||
Share repurchase program expiry date | Apr. 21, 2021 | Apr. 21, 2021 | Apr. 21, 2021 | |||||||||||||||||||||||||
Percentage of investment in counterparties and instruments | 10.00% | |||||||||||||||||||||||||||
Description of cash investment | Investments are subject to credit rating thresholds and at the time of investment, no more than 10% of surplus cash can be invested in any one issuer (excluding certain government bonds and investments in cash management banks) | |||||||||||||||||||||||||||
Weighted average maturity description of portfolio | The weighted-average maturity of the portfolio shall not be greater than 2 years, and the final maturity of any investment is not to exceed 5 years. | |||||||||||||||||||||||||||
Short term investments maximum liquidity period | 90 days | |||||||||||||||||||||||||||
Credit losses on short term investments | € 0 | € 0 | ||||||||||||||||||||||||||
Currency strengthening percentage | 10.00% | 10.00% | ||||||||||||||||||||||||||
Currency weakening percentage | 10.00% | 10.00% | ||||||||||||||||||||||||||
Effect of 10 percentage change in Euro against translation exposure currencies on equity | € 50,000,000 | € 12,000,000 | ||||||||||||||||||||||||||
Impact of percentage change in currency exchange on equity | 10.00% | 10.00% | ||||||||||||||||||||||||||
Increase or decrease in interest rate | 1.00% | 1.00% | ||||||||||||||||||||||||||
Impact of change in interest rate on interest income | € 6,000,000 | € 8,000,000 | ||||||||||||||||||||||||||
Changes in share price percentage | 10.00% | |||||||||||||||||||||||||||
Impact on the accrual for social costs on outstanding share-based payment awards | € 14,000,000 | 11,000,000 | ||||||||||||||||||||||||||
Gain associated with the changes in fair value of instruments | 0 | 8,000,000 | ||||||||||||||||||||||||||
Transfers between levels | 0 | 0 | ||||||||||||||||||||||||||
Warrants sold to acquire ordinary shares | € 15,000,000 | € 9,000,000 | € 27,000,000 | |||||||||||||||||||||||||
Ordinary shares acquired trough warrants issue | shares | 800,000 | 1,600,000 | 5,120,000 | |||||||||||||||||||||||||
Exercise price of warrants | € 190,090,000 | € 89,730,000 | € 50,610,000 | |||||||||||||||||||||||||
Warrant exercise price number of times of fair market value of ordinary shares | 1.3 times | 1.3 times | 1.2 times | |||||||||||||||||||||||||
Warrants expiry date | Jul. 1, 2022 | |||||||||||||||||||||||||||
Ordinary shares issued | shares | 1,991,627 | 1,600,000 | 9,431,960 | 9,431,960 | 1,754,960 | 4,800,000 | 8,233,160 | 4,204,120 | ||||||||||||||||||||
Number of warrants exercised | shares | 1,600,000 | |||||||||||||||||||||||||||
Number of warrants effectively net settled | shares | 3,520,000 | |||||||||||||||||||||||||||
Proceeds from exercise of warrants | € 74,000,000 | € 74,000,000 | 0 | € 0 | ||||||||||||||||||||||||
Purchase price related to estimated fair value of contingent consideration | € 13,000,000 | |||||||||||||||||||||||||||
Maximum potential contingent consideration payout over next three years | € 43,000,000 | |||||||||||||||||||||||||||
Expenses recorded within finance costs | € 0 | 201,000,000 | 524,000,000 | |||||||||||||||||||||||||
Reclassification of convertible notes to other paid in capital within equity | € 1,100,000,000 | |||||||||||||||||||||||||||
Tencent Music Entertainment Group | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Changes in share price percentage | 10.00% | |||||||||||||||||||||||||||
Non-controlling equity interest percentage | 8.00% | |||||||||||||||||||||||||||
Investments transferred from level 3 to level 1 | € 1,630,000,000 | |||||||||||||||||||||||||||
Non Designated Hedges | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Notional amount | € 0 | 0 | ||||||||||||||||||||||||||
Warrants | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Percentage of increase decrease in ordinary share price | 10.00% | |||||||||||||||||||||||||||
Convertible Notes | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Expenses recorded within finance costs | € 123,000,000 | |||||||||||||||||||||||||||
Cash Flow Hedges | Foreign Exchange Forwards | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Notional amount | € 1,538,000,000 | 968,000,000 | $ 67,000,000 | kr 2,053 | $ 402 | £ 570 | $ 335 | kr 1,238 | $ 48,000,000 | kr 1,869 | $ 330 | £ 484 | ||||||||||||||||
Financial Credit Risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Cash and cash equivalents and short term investments | 1,757,000,000 | 1,806,000,000 | ||||||||||||||||||||||||||
Top of Range | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Ordinary shares authorized to be repurchased | shares | 10,000,000 | 10,000,000 | ||||||||||||||||||||||||||
Approved share repurchase amount | € 1,000,000,000 | $ 1,000,000,000 | ||||||||||||||||||||||||||
Top of Range | Tencent Music Entertainment Group | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Value of the long term investment | 1,629,000,000 | 1,793,000,000 | ||||||||||||||||||||||||||
Top of Range | Warrants | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Value of warrants | 127,000,000 | 399,000,000 | ||||||||||||||||||||||||||
Bottom of Range | Tencent Music Entertainment Group | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Value of the long term investment | 1,333,000,000 | € 1,467,000,000 | ||||||||||||||||||||||||||
Bottom of Range | Warrants | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Value of warrants | € 75,000,000 | € 273,000,000 |
Financial Risk Management and_4
Financial Risk Management and Financial Instruments - Summary of Liquidity Position in Terms of Available Cash and Cash Equivalents and Short Term Investments (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of Liquidity Risk [Line Items] | ||
Short term investments | € 692 | € 915 |
Liquidity Position | ||
Disclosure Of Liquidity Risk [Line Items] | ||
Short term investments | 692 | 915 |
Short term deposits | 585 | 307 |
Cash at bank and on hand | 480 | 584 |
Total surplus liquidity | 1,757 | 1,806 |
Liquidity position | € 1,757 | € 1,806 |
Financial Risk Management and_5
Financial Risk Management and Financial Instruments - Summary of Immediate Impact on Net Loss Before Tax (Details) kr in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2019SEK (kr) | Dec. 31, 2018USD ($) | |
Disclosure Of Financial Instruments [Abstract] | |||
(Increase)/decrease in loss before tax | $ 121 | kr (13) | $ 74 |
Financial Risk Management and_6
Financial Risk Management and Financial Instruments - Summary of Notional Principal of the Foreign Currency Exchange Contracts by Hedged Line Item in Statement of Operations (Details) - Cash Flow Hedges - Foreign Exchange Forwards € in Millions, £ in Millions, kr in Millions, kr in Millions, $ in Millions, $ in Millions, $ in Millions | Dec. 31, 2019EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2019SEK (kr) | Dec. 31, 2019AUD ($) | Dec. 31, 2019GBP (£) | Dec. 31, 2019CAD ($) | Dec. 31, 2019NOK (kr) | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2018SEK (kr) | Dec. 31, 2018AUD ($) | Dec. 31, 2018GBP (£) |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||
Notional amount in foreign currency | € 1,538 | $ 67 | kr 2,053 | $ 402 | £ 570 | $ 335 | kr 1,238 | € 968 | $ 48 | kr 1,869 | $ 330 | £ 484 |
Revenue | ||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||
Notional amount in foreign currency | 38 | 1,221 | 226 | 328 | 194 | 739 | 27 | 1,112 | 187 | 282 | ||
Cost of Revenue | ||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||
Notional amount in foreign currency | $ 29 | kr 832 | $ 176 | £ 242 | $ 141 | kr 499 | $ 21 | kr 757 | $ 143 | £ 202 |
Financial Risk Management and_7
Financial Risk Management and Financial Instruments - Summary of Major Security Type, Financial Assets and Liabilities that are Measured at Fair Value on Recurring Basis and Category Using Fair Value Hierarchy (Details) - EUR (€) € in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Financial assets at fair value | ||
Total financial assets at fair value by level | € 2,197 | € 2,569 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 138 | 339 |
Contingent consideration | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 27 | |
Derivatives (Designated for Hedging) | Foreign Exchange Forwards | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 13 | |
Derivatives (Not Designated for Hedging) | Warrants | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 98 | 333 |
Foreign Exchange Forwards | Derivatives (Designated for Hedging) | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 8 | 6 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 6 | |
Short Term Investments | Government Securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 268 | 221 |
Short Term Investments | Agency Securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 5 | 7 |
Short Term Investments | Corporate Notes | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 263 | 343 |
Short Term Investments | Collateralized Reverse Purchase Agreements | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 156 | 344 |
Long Term Investment | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 1,497 | 1,646 |
Other | Derivatives (Not Designated for Hedging) | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 2 | |
Level 1 | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 1,710 | 1,794 |
Level 1 | Short Term Investments | Government Securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 229 | 164 |
Level 1 | Long Term Investment | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 1,481 | 1,630 |
Level 2 | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 471 | 757 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 13 | 6 |
Level 2 | Derivatives (Designated for Hedging) | Foreign Exchange Forwards | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 13 | |
Level 2 | Foreign Exchange Forwards | Derivatives (Designated for Hedging) | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 8 | 6 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 6 | |
Level 2 | Short Term Investments | Government Securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 39 | 57 |
Level 2 | Short Term Investments | Agency Securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 5 | 7 |
Level 2 | Short Term Investments | Corporate Notes | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 263 | 343 |
Level 2 | Short Term Investments | Collateralized Reverse Purchase Agreements | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 156 | 344 |
Level 3 | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 16 | 18 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 125 | 333 |
Level 3 | Contingent consideration | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 27 | |
Level 3 | Derivatives (Not Designated for Hedging) | Warrants | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 98 | 333 |
Level 3 | Long Term Investment | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | € 16 | 16 |
Level 3 | Other | Derivatives (Not Designated for Hedging) | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | € 2 |
Financial Risk Management and_8
Financial Risk Management and Financial Instruments - Summary of Changes in Investment in TME (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
At January 1 | € 1,646 | ||
Equity issued in exchange for long term investment | € (910) | ||
At December 31 | 1,497 | € 1,646 | |
TME | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
At January 1 | 1,630 | 910 | |
Equity issued in exchange for long term investment | 910 | ||
Changes in fair value recorded in other comprehensive loss | (149) | 720 | |
At December 31 | € 1,481 | € 1,630 | € 910 |
Financial Risk Management and_9
Financial Risk Management and Financial Instruments - Summary of Weightings Applied to Valuation Method (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
PWERM | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 50.00% | |
Secondary Market Transactions | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 50.00% | |
Bottom of Range | PWERM | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 50.00% | |
Bottom of Range | Secondary Market Transactions | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 20.00% | |
Top of Range | PWERM | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 80.00% | |
Top of Range | Secondary Market Transactions | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 50.00% |
Financial Risk Management an_10
Financial Risk Management and Financial Instruments - Summary of PWERM Valuations (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Market Approach Under PWERM | Low Case Public Company | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 35.00% | |
Market Approach Under PWERM | Bottom of Range | High Case Public Company | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 55.00% | 25.00% |
Market Approach Under PWERM | Bottom of Range | Low Case Public Company | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 28.00% | |
Market Approach Under PWERM | Bottom of Range | High Case Transaction | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 0.00% | 4.00% |
Market Approach Under PWERM | Bottom of Range | Low Case Transaction | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 0.00% | 4.00% |
Market Approach Under PWERM | Top of Range | High Case Public Company | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 70.00% | 40.00% |
Market Approach Under PWERM | Top of Range | Low Case Public Company | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 35.00% | |
Market Approach Under PWERM | Top of Range | High Case Transaction | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 3.00% | 6.00% |
Market Approach Under PWERM | Top of Range | Low Case Transaction | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 2.00% | 6.00% |
Income and Market Approaches Under PWERM | Bottom of Range | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 2.00% | 5.00% |
Income and Market Approaches Under PWERM | Top of Range | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Percentage of weightings | 5.00% | 30.00% |
Financial Risk Management an_11
Financial Risk Management and Financial Instruments - Summary of Key Assumptions Used to Estimate Fair Value of Ordinary Shares and Contingent Options Using PWERM (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Revenue multiple used to estimate enterprise value | 3 | |
Discount rate (%) | 13.00% | |
Bottom of Range | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Revenue multiple used to estimate enterprise value | 2.2 | |
Discount rate (%) | 13.00% | |
Bottom of Range | Historical Volatility for Shares, Measurement Input | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Volatility (%) | 32.5 | 30 |
Top of Range | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Revenue multiple used to estimate enterprise value | 4.6 | |
Discount rate (%) | 19.50% | |
Top of Range | Historical Volatility for Shares, Measurement Input | ||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||
Volatility (%) | 35 | 37.5 |
Financial Risk Management an_12
Financial Risk Management and Financial Instruments - Summary of Assumption Used to Estimate Fair Value of Warrants (Details) - Warrants | 12 Months Ended | ||
Dec. 31, 2019USD ($)yr | Dec. 31, 2018USD ($)yr | Dec. 31, 2017USD ($)yr | |
Disclosure Of Significant Unobservable Inputs Used In Fair Value Measurement Of Liabilities [Line Items] | |||
Share price (US$) | $ | $ 149.55 | $ 113.50 | $ 120.50 |
Historical Volatility for Shares, Measurement Input | |||
Disclosure Of Significant Unobservable Inputs Used In Fair Value Measurement Of Liabilities [Line Items] | |||
Volatility (%) | 32.5 | 40 | 30 |
Bottom of Range | |||
Disclosure Of Significant Unobservable Inputs Used In Fair Value Measurement Of Liabilities [Line Items] | |||
Expected term (years) | 0.5 | 0.8 | 0.9 |
Risk free rate (%) | 1.58% | 2.55% | 1.71% |
Top of Range | |||
Disclosure Of Significant Unobservable Inputs Used In Fair Value Measurement Of Liabilities [Line Items] | |||
Expected term (years) | 2.5 | 1.5 | 1.1 |
Risk free rate (%) | 1.59% | 2.58% | 1.76% |
Financial Risk Management an_13
Financial Risk Management and Financial Instruments - Summary of Changes in Warrants Liability (Details) - Warrants - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Changes In Warrants Liability [Line Items] | |||
Beginning balance | € 333 | € 346 | € 34 |
Issuance of warrant for cash | 15 | 9 | |
Issuance of shares upon exercise of, or net settlement of, warrants | (303) | ||
Non cash changes recognized in profit or loss | |||
Changes in fair value | 35 | (39) | 313 |
Effect of changes in foreign exchange rates | 18 | 26 | (10) |
Ending balance | € 98 | € 333 | € 346 |
Financial Risk Management an_14
Financial Risk Management and Financial Instruments - Summary of Changes in Contingent Consideration Liability (Details) - Contingent consideration € in Millions | 12 Months Ended |
Dec. 31, 2019EUR (€) | |
Disclosure Of Financial Instruments [Line Items] | |
Initial recognition of contingent consideration included in purchase consideration of acquisition | € 13 |
Non cash changes recognized in profit or loss | |
Changes in fair value | 14 |
At December 31 | € 27 |
Financial Risk Management an_15
Financial Risk Management and Financial Instruments - Summary of Changes in Convertible Notes (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Financial Instruments [Abstract] | ||
Beginning balance | € 944 | € 1,106 |
Changes in fair value | 221 | 666 |
Effect of changes in foreign exchange rates | (20) | (142) |
Issuance of shares upon exchange of Convertible Notes | (1,145) | (686) |
Ending balance | € 0 | € 944 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancellable Operating Leases (Details) - EUR (€) | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure Of Finance Leases And Operating Leases By Lessee [Line Items] | ||
Minimum lease payments under non-cancellable lease | € 833,000,000 | € 769,000,000 |
Not Later Than One Year | ||
Disclosure Of Finance Leases And Operating Leases By Lessee [Line Items] | ||
Minimum lease payments under non-cancellable lease | 62,000,000 | 47,000,000 |
Later Than One Year But Not More Than 5 Years | ||
Disclosure Of Finance Leases And Operating Leases By Lessee [Line Items] | ||
Minimum lease payments under non-cancellable lease | 288,000,000 | 244,000,000 |
Later Than Five Years | ||
Disclosure Of Finance Leases And Operating Leases By Lessee [Line Items] | ||
Minimum lease payments under non-cancellable lease | € 483,000,000 | € 478,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments And Contingencies [Line Items] | |||
Lease expenses | € 79 | € 52 | |
Commitments And Contingencies [Line Items] | |||
Minimum Spend Commitments Under Non-cancelable Purchase Obligations and Service Agreement | € 200 | ||
Service Agreement Term | 2 years |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Minimum Guarantees Relating to Service, Majority Relate to Minimum Royalty Payments Associated with License Agreements for the use of Licensed Content (Details) - EUR (€) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure Of Minimum Royalty Payments Associated With License Agreements [Line Items] | |||
Minimum royalty payments associated with license agreements | € 1,040,000,000 | € 700,000,000 | € 1,695,000,000 |
Not Later Than One Year | |||
Disclosure Of Minimum Royalty Payments Associated With License Agreements [Line Items] | |||
Minimum royalty payments associated with license agreements | 657,000,000 | 548,000,000 | 1,060,000,000 |
Later Than One Year But Not More Than 5 Years | |||
Disclosure Of Minimum Royalty Payments Associated With License Agreements [Line Items] | |||
Minimum royalty payments associated with license agreements | € 383,000,000 | € 152,000,000 | € 635,000,000 |
Related Party Transaction - Sum
Related Party Transaction - Summary of Related Party Transactions (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Key management compensation | |||
Short term employee benefits | € 5 | € 4 | € 4 |
Share-based payments | 22 | 19 | 17 |
Termination benefits | 0 | 1 | 1 |
Total key management compensation | € 27 | € 24 | € 22 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) € in Millions | Oct. 17, 2019Beneficiary_Certificateshares | Oct. 04, 2019EUR (€)Beneficiary_Certificateshares | Jul. 01, 2019EUR (€)shares | Jul. 01, 2019$ / shares | Oct. 17, 2016EUR (€)shares | Oct. 17, 2016$ / shares | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | Jan. 31, 2018shares | Jan. 01, 2018shares | Dec. 29, 2017shares | Dec. 15, 2017shares | Nov. 20, 2013shares | Nov. 13, 2012shares |
Disclosure Of Transactions Between Related Parties [Line Items] | |||||||||||||||
Warrants expiry date | Jul. 1, 2022 | ||||||||||||||
Ordinary shares issued | 1,991,627 | 1,600,000 | 9,431,960 | 9,431,960 | 1,754,960 | 4,800,000 | 8,233,160 | 4,204,120 | |||||||
Number of warrants exercised | 1,600,000 | ||||||||||||||
Proceeds from exercise of warrants | € | € 74 | € 74 | € 0 | € 0 | |||||||||||
Number of warrants effectively net settled | 3,520,000 | ||||||||||||||
Certain Members of Key Management | |||||||||||||||
Disclosure Of Transactions Between Related Parties [Line Items] | |||||||||||||||
Proceeds from warrants issued | € | € 15 | € 27 | |||||||||||||
Number of ordinary shares that can be acquired from warrants issued | 800,000 | 5,120,000 | |||||||||||||
Exercise price of each warrant | $ / shares | $ 190.09 | $ 50.61 | |||||||||||||
Exercise price of each warrant to fair market value of ordinary shares on date of issuance | 130.00% | 120.00% | |||||||||||||
Warrants expiry date | Jul. 1, 2022 | ||||||||||||||
Ordinary shares issued | 1,991,627 | 1,600,000 | |||||||||||||
Number of warrants exercised | 1,600,000 | ||||||||||||||
Proceeds from exercise of warrants | € | € 74 | ||||||||||||||
Number of warrants effectively net settled | 3,520,000 | ||||||||||||||
Certain Members of Key Management | D.G.E Investments Limited | |||||||||||||||
Disclosure Of Transactions Between Related Parties [Line Items] | |||||||||||||||
Ordinary shares issued | 905,285 | ||||||||||||||
Number of beneficiary certificates issued | Beneficiary_Certificate | 9,052,850 | 16,000,000 | |||||||||||||
Number of warrants exercised | 1,600,000 | ||||||||||||||
Number of warrants effectively net settled | 1,600,000 | ||||||||||||||
Certain Members of Key Management | Rosello Company Limited | |||||||||||||||
Disclosure Of Transactions Between Related Parties [Line Items] | |||||||||||||||
Ordinary shares issued | 1,086,342 | ||||||||||||||
Number of beneficiary certificates issued | Beneficiary_Certificate | 10,863,420 | ||||||||||||||
Number of warrants effectively net settled | 1,920,000 |
Group Information - Summary of
Group Information - Summary of Company's Principal Subsidiaries (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Spotify AB | Sweden | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify AB |
Principal activities | Main operating company |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Sweden |
Spotify USA Inc. | USA | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify USA Inc. |
Principal activities | USA operating company |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | USA |
Spotify Ltd | UK | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Ltd |
Principal activities | Sales, marketing, contract research and development, and customer support |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | UK |
Spotify Norway AS | Norway | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Norway AS |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Norway |
Spotify Spain S.L. | Spain | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Spain S.L. |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Spain |
Spotify GmbH | Germany | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify GmbH |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Germany |
Spotify France SAS | France | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify France SAS |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | France |
Spotify Netherlands B.V. | Netherlands | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Netherlands B.V. |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Netherlands |
Spotify Canada Inc. | Canada | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Canada Inc. |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Canada |
Spotify Australia Pty Ltd | Australia | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Australia Pty Ltd |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Australia |
Spotify Brasil Serviços De Música LTDA | Brazil | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Brasil Serviços De Música LTDA |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Brazil |
Spotify Japan K.K | Japan | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Japan K.K |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Japan |
Spotify India LLP | India | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify India LLP |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | India |
Spotify Singapore Pte Ltd. | Singapore | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Singapore Pte Ltd. |
Principal activities | Marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Singapore |
Events After the Reporting Pe_2
Events After the Reporting Period - Additional Information (Details) | 1 Months Ended |
Feb. 12, 2020EUR (€) | |
Major Business Acquisition | Bottom of Range | Bill Simmons Media Group, LLC | |
Disclosure Of Nonadjusting Events After Reporting Period [Line Items] | |
Total purchase consideration | € 130,000,000 |
Major Business Acquisition | Top of Range | Bill Simmons Media Group, LLC | |
Disclosure Of Nonadjusting Events After Reporting Period [Line Items] | |
Total purchase consideration | 180,000,000 |
License Agreements Guarantee with Music Publishers | |
Disclosure Of Nonadjusting Events After Reporting Period [Line Items] | |
Minimum guarantee commitments for royalty payments | € 186,000,000 |
Minimum guarantee commitments for royalty payments years | three years |