Cover
Cover | 12 Months Ended |
Dec. 31, 2022 shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2022 |
Current Fiscal Year End Date | --12-31 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-38438 |
Entity Registrant Name | Spotify Technology S.A. |
Entity Incorporation, State or Country Code | N4 |
Entity Address, Address Line One | 5, Place de la Gare |
Entity Address, Postal Zip Code | L- 1616 |
Entity Address, City or Town | Luxembourg |
Entity Address, Country | LU |
Title of 12(b) Security | Ordinary Shares (par value of €0.000625 per share) |
Trading Symbol | SPOT |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 193,293,269 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | International Financial Reporting Standards |
Entity Shell Company | false |
Amendment Flag | false |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Entity Central Index Key | 0001639920 |
Business Contact | |
Document Information [Line Items] | |
Entity Address, Address Line One | 150 Greenwich Street |
Entity Address, Postal Zip Code | 10007 |
Entity Address, City or Town | New York |
Contact Personnel Name | Eve Konstan |
Contact Personnel Email Address | ir@spotify.com |
Entity Address, Address Line Two | 63rd Floor |
Entity Address, State or Province | NY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 1433 |
Auditor Name | Ernst & Young AB |
Auditor Location | Stockholm, Sweden |
Consolidated statement of opera
Consolidated statement of operations - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Profit or loss [abstract] | |||
Revenue | € 11,727 | € 9,668 | € 7,880 |
Cost of revenue | 8,801 | 7,077 | 5,865 |
Gross profit | 2,926 | 2,591 | 2,015 |
Research and development | 1,387 | 912 | 837 |
Sales and marketing | 1,572 | 1,135 | 1,029 |
General and administrative | 626 | 450 | 442 |
Total operating expense | 3,585 | 2,497 | 2,308 |
Operating (loss)/income | (659) | 94 | (293) |
Finance income | 421 | 246 | 94 |
Finance costs | (132) | (91) | (510) |
Finance income/(costs) - net | 289 | 155 | (416) |
(Loss)/income before tax | (370) | 249 | (709) |
Income tax expense/(benefit) | 60 | 283 | (128) |
Net loss attributable to owners of the parent | € (430) | € (34) | € (581) |
Loss per share attributable to owners of the parent | |||
Basic (euro per share) | € (2.23) | € (0.18) | € (3.10) |
Diluted (euro per share) | € (2.93) | € (1.03) | € (3.10) |
Weighted-average ordinary shares outstanding | |||
Basic (in shares) | 192,934,862 | 191,298,397 | 187,583,307 |
Diluted (in shares) | 195,846,362 | 193,943,455 | 187,583,307 |
Consolidated statement of compr
Consolidated statement of comprehensive loss - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of comprehensive income [abstract] | |||
Net loss attributable to owners of the parent | € (430) | € (34) | € (581) |
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 | (15) | (8) | 4 |
Change in net unrealized gain or loss on cash flow hedging instruments | 14 | (1) | 1 |
Change in foreign currency translation adjustment | 83 | 71 | (43) |
Items not to be subsequently reclassified to consolidated statement of operations (net of tax): | |||
Gains/(losses) in the fair value of long term investments | 190 | (981) | 615 |
Change in fair value of Exchangeable Notes attributable to changes in credit risk | 3 | 0 | 0 |
Other comprehensive income/(loss) for the year (net of tax) | 275 | (919) | 577 |
Total comprehensive loss for the year attributable to owners of the parent | € (155) | € (953) | € (4) |
Consolidated statement of finan
Consolidated statement of financial position - EUR (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Non-current assets | ||
Lease right-of-use assets | € 417 | € 437 |
Property and equipment | 348 | 372 |
Goodwill | 1,168 | 894 |
Intangible assets | 127 | 89 |
Long term investments | 1,138 | 916 |
Restricted cash and other non-current assets | 78 | 77 |
Deferred tax assets | 8 | 13 |
Non-current assets | 3,284 | 2,798 |
Current assets | ||
Trade and other receivables | 690 | 621 |
Income tax receivable | 5 | 5 |
Short term investments | 867 | 756 |
Cash and cash equivalents | 2,483 | 2,744 |
Other current assets | 307 | 246 |
Current assets | 4,352 | 4,372 |
Total assets | 7,636 | 7,170 |
Equity | ||
Share capital | 0 | 0 |
Other paid in capital | 4,789 | 4,746 |
Treasury shares | (262) | (260) |
Other reserves | 1,521 | 853 |
Accumulated deficit | (3,647) | (3,220) |
Equity attributable to owners of the parent | 2,401 | 2,119 |
Non-current liabilities | ||
Exchangeable Notes | 1,128 | 1,202 |
Lease liabilities | 555 | 579 |
Accrued expenses and other liabilities | 28 | 37 |
Provisions | 3 | 7 |
Deferred tax liabilities | 5 | 0 |
Non-current liabilities | 1,719 | 1,825 |
Current liabilities | ||
Trade and other payables | 845 | 793 |
Income tax payable | 11 | 23 |
Deferred revenue | 520 | 458 |
Accrued expenses and other liabilities | 2,093 | 1,841 |
Provisions | 26 | 22 |
Derivative liabilities | 21 | 89 |
Current liabilities | 3,516 | 3,226 |
Total liabilities | 5,235 | 5,051 |
Total equity and liabilities | € 7,636 | € 7,170 |
Consolidated statement of chang
Consolidated statement of changes in equity - 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, 2019 | 184,325,957 | ||||||
Beginning balance at Dec. 31, 2019 | € 2,037 | € 0 | € (370) | € 4,192 | € 924 | € (2,709) | |
(Loss) income for the year | (581) | (581) | |||||
Other comprehensive income (loss) | 577 | 577 | |||||
Issuance of ordinary shares (in shares) | 5,038,200 | ||||||
Repurchases of ordinary shares (in shares) | (5,038,200) | ||||||
Issuance of shares upon exercise of stock options and restricted stock units (in shares) | 4,802,847 | ||||||
Issuance of shares upon exercise of stock options, restricted stock units, and contingently issuable shares | € 319 | 195 | 124 | ||||
Issuance of shares upon exercise of, or net settlement of, warrants (in shares) | 1,084,043 | ||||||
Issuance of shares upon exercise of, or net settlement of, warrants | € 267 | 0 | |||||
Restricted stock units withheld for employee taxes | (29) | (29) | |||||
Share-based compensation | 181 | 181 | |||||
Income tax impact associated with share-based compensation | 34 | 34 | |||||
Ending balance (in shares) at Dec. 31, 2020 | 190,212,847 | ||||||
Ending balance at Dec. 31, 2020 | 2,805 | 0 | (175) | 4,583 | 1,687 | (3,290) | |
(Loss) income for the year | (34) | (34) | |||||
Other comprehensive income (loss) | (919) | (919) | |||||
Reclassification of gain on sale of long term investments, net of tax | 0 | (134) | 134 | ||||
Reclassification of tax effect of gain on sale of long term investments | € 0 | 30 | (30) | ||||
Issuance of ordinary shares (in shares) | 2,000,000 | ||||||
Repurchases of ordinary shares (in shares) | (2,458,324) | (2,458,234) | |||||
Repurchases of ordinary shares | € (89) | (89) | |||||
Issuance of shares upon exercise of stock options and restricted stock units (in shares) | 2,397,198 | ||||||
Issuance of shares upon exercise of stock options, restricted stock units, and contingently issuable shares | 167 | 4 | 163 | ||||
Restricted stock units withheld for employee taxes | (54) | (54) | |||||
Share-based compensation | 222 | 222 | |||||
Income tax impact associated with share-based compensation | 21 | 21 | |||||
Ending balance (in shares) at Dec. 31, 2021 | 192,151,811 | ||||||
Ending balance at Dec. 31, 2021 | 2,119 | 0 | (260) | 4,746 | 853 | (3,220) | |
(Loss) income for the year | (430) | (430) | |||||
Other comprehensive income (loss) | 275 | 275 | |||||
Reclassification of gain on sale of long term investments, net of tax | € 0 | (3) | 3 | ||||
Issuance of ordinary shares (in shares) | 1,243,901 | ||||||
Repurchases of ordinary shares (in shares) | (1,209,040) | (1,209,040) | |||||
Repurchases of ordinary shares | € (2) | (2) | |||||
Issuance of shares upon exercise of stock options and restricted stock units (in shares) | 1,106,597 | ||||||
Issuance of shares upon exercise of stock options, restricted stock units, and contingently issuable shares | 43 | 0 | 43 | ||||
Restricted stock units withheld for employee taxes | (40) | (40) | |||||
Share-based compensation | 385 | 385 | |||||
Income tax impact associated with share-based compensation | € 51 | 51 | |||||
Ending balance (in shares) at Dec. 31, 2022 | 193,293,269 | ||||||
Ending balance at Dec. 31, 2022 | € 2,401 | € 0 | € (262) | € 4,789 | € 1,521 | € (3,647) |
Consolidated statement of cash
Consolidated statement of cash flows - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | |||
Net loss | € (430) | € (34) | € (581) |
Adjustments to reconcile net loss to net cash flows | |||
Depreciation of property and equipment and lease right-of-use assets | 118 | 94 | 86 |
Amortization of intangible assets | 53 | 33 | 25 |
Excess and obsolete reserve | 14 | 0 | 0 |
Share-based compensation expense | 381 | 223 | 176 |
Finance income | (421) | (246) | (94) |
Finance costs | 132 | 91 | 510 |
Income tax expense/(benefit) | 60 | 283 | (128) |
Other | 7 | 6 | 7 |
Changes in working capital: | |||
Increase in trade receivables and other assets | (84) | (245) | (187) |
Increase in trade and other liabilities | 226 | 137 | 425 |
Increase in deferred revenue | 52 | 67 | 73 |
(Decrease)/increase in provisions | (3) | 5 | 6 |
Interest paid on lease liabilities | (53) | (50) | (55) |
Interest received | 37 | 3 | 4 |
Income tax paid | (43) | (6) | (8) |
Net cash flows from operating activities | 46 | 361 | 259 |
Investing activities | |||
Business combinations, net of cash acquired | (306) | (115) | (336) |
Purchases of property and equipment | (25) | (85) | (78) |
Purchases of short term investments | (457) | (497) | (1,354) |
Sales and maturities of short term investments | 368 | 375 | 1,421 |
Sales of long term investments | 0 | 144 | 0 |
Change in restricted cash | 0 | 1 | 2 |
Other | (3) | (10) | (27) |
Net cash flows used in investing activities | (423) | (187) | (372) |
Financing activities | |||
Payments of lease liabilities | (43) | (35) | (24) |
Lease incentives received | 2 | 7 | 20 |
Repurchases of ordinary shares | (2) | (89) | 0 |
Proceeds from exercise of stock options | 43 | 167 | 319 |
Proceeds from issuance of warrants | 0 | 31 | 0 |
Proceeds from issuance of Exchangeable Notes, net of costs | 0 | 1,223 | 0 |
Payments for employee taxes withheld from restricted stock unit releases | (40) | (54) | (30) |
Net cash flows (used in)/from financing activities | (40) | 1,250 | 285 |
Net (decrease)/increase in cash and cash equivalents | (417) | 1,424 | 172 |
Cash and cash equivalents at January 1 | 2,744 | 1,151 | 1,065 |
Net foreign exchange gains/(losses) on cash and cash equivalents | 156 | 169 | (86) |
Cash and cash equivalents at December 31 | 2,483 | 2,744 | 1,151 |
Non-cash investing and financing activities | |||
Deferred consideration liability recognized in conjunction with business combination | 0 | 9 | 32 |
Recognition of lease right-of-use asset in exchange for lease liabilities | 20 | 23 | 29 |
Purchases of property and equipment in trade and other liabilities | 5 | 13 | 16 |
Issuance of shares upon exercise of, or effective net settlement of, warrants | € 0 | € 0 | € 267 |
Corporate information
Corporate information | 12 Months Ended |
Dec. 31, 2022 | |
Corporate Information [Abstract] | |
Corporate information | Corporate information Spotify Technology S.A. (the “Company” or “parent”) is a public limited company incorporated and domiciled in Luxembourg. The Company’s registered office is 5, place de la Gare L-1616, Luxembourg, Grand Duchy of Luxembourg. The principal activity of the Company and its subsidiaries (collectively, the “Group,” "we," "us," or "our") 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 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, 2022 | |
Disclosure Of Summary Of Significant Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been applied consistently to all the years presented, unless otherwise stated. (a) Basis of preparation 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 short term investments, long term investments, Exchangeable Senior Notes (the "Exchangeable 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. (b) Basis of consolidation Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed, or has right 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 Group's reporting 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) Revenue recognition Premium revenue The Group generates subscription revenue through the sale of the Premium Service in which customers can listen on-demand and offline. The Premium Service is 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, the Premium Service is 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, which is the delivery of the Premium Service. Additionally, the Group bundles the Premium Service with other 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 generated primarily from the sale of display, audio, and video advertising delivered through advertising impressions across music and podcast content. The Group enters into arrangements with advertising agencies that purchase advertising on our platform on behalf of their clients. The Group also enters into arrangements directly with some large advertisers. These advertising arrangements are typically sold on a cost-per-thousand basis and are evidenced by an Insertion Order, a submission of order placements through a self-serve platform that includes the online acceptance of terms and conditions, or contracts that specify 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 based on the number of impressions delivered. Additionally, the Group generates Ad-Supported revenue through arrangements with certain advertising automated exchanges, internal self-serve, and advertising marketplace platforms to distribute advertising inventory for purchase on a cost-per-thousand basis. Revenue is recognized when impressions are delivered on the platform. (e) Advertising credits Advertising credits that are not transferable are issued to certain rights holders and allow them to include advertisements 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 no additional 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 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 has replaced awards held by the employees of the acquiree with its share-based compensation awards, whereby the vesting of the Group’s replacement awards is contingent on continued employment with the Group. Replacements of share-based compensation awards are accounted for as modifications of the acquiree’s existing share-based compensation 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 Cost of revenue consists predominantly of royalty and distribution costs related to content streaming. The Group incurs royalty costs paid to record labels, music publishers, and other rights holders for the right to stream music to the Group’s users. Royalties are typically calculated monthly 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 requires complex IT systems and a significant volume of data and is 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 or determination of statutory rates 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 reflects discounts provided by certain rights holders in return for promotional activities in connection with marketplace programs. Additionally, cost of revenue 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 the amortization of podcast content assets. Amortization of podcast content assets is recorded over the shorter of the estimated useful economic life, or the license period (if relevant), and begins at the release of each episode. In most cases, amortization is on an accelerated basis. We make payments to podcast publishers, whose content we monetize through advertising sales. The amounts owed are most often a share of revenues and recognized in cost of revenue when the related revenue is recognized. (h) Research and development expenses Research and development expenses primarily comprise 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 and desktop applications and streaming services. The costs incurred include related employee compensation and benefits costs, consulting costs, and facilities costs. (i) Sales and marketing expenses Sales and marketing expenses primarily comprise employee compensation and benefits, sponsorships, 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 music record labels, publishers, songwriters, and artists to promote the availability of new releases on the Group’s platform, and the costs of providing free trials. Expenses included in the costs of providing free trials are derived primarily from per user royalty fees determined in accordance with the rights holder agreements. (j) General and administrative expenses General and administrative expenses primarily comprise employee compensation and benefits for functions such as finance, accounting, analytics, legal, human resources, consulting fees, and other costs including facility and equipment costs, directors' and officers’ liability insurance, director fees, and fair value adjustments on contingent consideration. (k) Income tax The tax expense for the period comprises current and deferred tax. Tax is recognized in the consolidated statement of operations except to the extent 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 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 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, such as when there is a legally enforceable right to offset. (iii) Uncertain tax positions Management periodically evaluates positions taken in tax returns in which applicable tax legislation is subject to interpretation, and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty. (l) Leases At the 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 are assessed under IAS 37 and are not within the scope of IFRS 16. 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 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. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, lease term, or if the Group changes its assessment of whether it will exercise an extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Group leases certain properties under non-cancellable lease agreements that relate to office space. The expected lease terms are between one 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 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) Intangible assets Acquired intangible assets other than goodwill comprise acquired developed technology, trade names, customer relationships, publisher relationships, 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, 3 to 8 years for trade names and trademarks, 3 to 10 years for customer and publisher relationships, 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 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. (p) Impairment of non-financial assets 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) Financial instruments (i) Financial assets Initial recognition and measurement The Group’s financial assets comprise 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 primarily comprise 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 . These are classified as current assets. Long term investments primarily comprise equity instruments carried at fair value through other comprehensive income based on the irrevocable election made at initial recognition under IFRS 9 Financial Instruments . The securities within this category are intended to be held for an indefinite period of time and for strategic investment purposes. These are not held for trading. These are classified as non-current assets. The Group’s primary long term investment is its equity investment in Tencent Music Entertainment Group (“TME”). Subsequent measurement After initial measurement, short term investments are primarily 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. 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. Gains or losses realized on the sale of these long term investments are not recycled through the profit and loss, but are instead reclassified to accumulated deficit within equity. Dividends received are recognized in the consolidated statement of operations in finance income. 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 the credit risk related to these assets is low 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 equity investments are not assessed for impairment due to the irrevocable election made under IFRS 9 Financial Instruments as stated above. 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 . Therefore, the Group does not determine if the credit risk for these instruments has increased significantly since initial recognition. Instead, a loss allowance is recognized based on lifetime expected credit losses at each reporting date. Impairment losses and subsequent reversals are recognized in profit or loss and is the amount required to adjust the loss allowance at the reporting date to the amount that is required to be recognized based on the aforementioned policy. The Group has established a provision matrix based on its historical credit loss experiences, adjusted for forward-looking factors specific to the debtors and the economic environment. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognized in the consolidated statement of operations. (ii) Financial liabilities Initial recognition and measurement The Group’s financial liabilities are comprised of trade and other payables, lease liabilities, Exchangeable Notes, derivative liabilities (warrants and instruments designated for hedging), and other liabilities, including contingent consideration. All financial liabilities except lease liabilities are recognized initially at fair value. The Group accounts for the Exchangeable Notes at fair value through profit and loss using the fair value option in accordance with IFRS 9, Financial Instruments. Under this approach, the Exchangeable Notes are accounted for in their entirety at fair value, with any change in fair value after initial measurement being recorded in finance income or cost in the consolidated statement of operations, except that changes in fair value that are due to changes in own credit risk are presented separately in other comprehensive income/(loss) and will not be reclassified to the consolidated statement of operations. The Group classified the Exchangeable Notes as a financial liability in accordance with IAS 32, Financial Instruments: Prese |
Critical accounting estimates a
Critical accounting estimates and judgments | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of changes in accounting estimates [abstract] | |
Critical accounting estimates and judgments | Critical accounting estimates and judgments 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) Share-based compensation - The Group measures the cost of equity-settled transactions with employees and directors by reference to the fair value of the equity instruments at the date at which they are granted. The assumptions and models used for estimating the fair value of share-based compensation transactions are disclosed in Note 19. The Group also estimates a forfeiture rate to calculate the stock-based compensation expense for the awards. The forfeiture rate is based on an analysis of actual forfeitures. (ii) Deferred taxes - The Group has recognized deferred tax assets for tax loss carry-forwards, tax credits and deductible temporary differences. The Group also has significant unrecognized deferred tax assets. At period end, we assess whether there is convincing evidence that the Group will generate future taxable income against which deferred tax assets can be utilized and, thus, that recovery is probable. See Note 10. (iii) Goodwill impairment - 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. (iv) Content - 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 or determination of statutory rates 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 requires complex IT systems and a significant volume of data as well as significant judgements, assumptions, and estimates of the amounts to be paid. See Note 22. Additionally, the economic life and expected amortization profile of podcast content assets is estimated by management based on historical listening patterns and is evaluated on an ongoing basis. See Note 2 and 17. (v) Provisions - Management makes significant assumptions and estimates when determining the amounts to record for provision for legal contingencies. See Note 23. (vi) Business combinations - 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. (vii) Leases - 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. 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. (viii) Exchangeable Notes and warrants - the fair value of the Group's Exchangeable Notes and warrants are estimated using valuation techniques and inputs based on management's judgment and conditions that exist at each reporting date. See Note 24. |
Revenue recognition
Revenue recognition | 12 Months Ended |
Dec. 31, 2022 | |
Contract liabilities [abstract] | |
Revenue recognition | Revenue recognition Revenue from contracts with customers (i) Disaggregated revenue The Group discloses revenue by reportable segment and geographic area in Note 6. (ii) Performance obligations 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 primarily 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, 2022 and 2021, the Group had deferred revenue of €520 million and €458 million, respectively. The increase in deferred revenue in 2022 is primarily 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 of up to a year. Revenue recognized that was included in the contract liability balance at the beginning of the years ended December 31, 2022, 2021, and 2020 is €448 million, €372 million, and €301 million, respectively. |
Business combinations
Business combinations | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of detailed information about business combination [abstract] | |
Business combinations | Business combinations The following sections describe the Group’s material acquisitions during the years ended December 31, 2022. Sonantic On July 11, 2022, the Group acquired 100% of Sonantic Limited ("Sonantic"), an artificial intelligence voice platform. This acquisition allows the Group to expand text-to-speech capabilities across the Group's platform. The fair value of the purchase consideration was €93 million in cash, paid at closing. The acquisition was accounted for under the acquisition method. Of the total purchase consideration, €64 million has been recorded to goodwill, €31 million to acquired intangible assets, €2 million to cash and cash equivalents and €4 million to deferred tax liabilities. The Group incurred €2 million in acquisition-related costs that 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 expected future synergies and the technical expertise of the acquired workforce. None of the goodwill recorded is expected to be deductible for tax purposes. €48 million of goodwill was allocated to the Premium segment, and €16 million of goodwill was allocated to the Ad-Supported segment. The intangible asset acquired relates to existing technology. The useful life of the existing technology is five years. The Group valued the existing technology using the replacement cost method under the cost approach. In addition to the purchase consideration, there are cash payments of €30 million that are contingent on the continued employment of certain employees. In addition, €4 million of equity instruments were offered to and accepted by certain employees, which have vesting conditions contingent upon continued employment and are accounted for as equity-settled share-based compensation transactions. These cash payments and share-based compensation transactions are recognized as post-combination expense over employment service periods of up to four years, if not forfeited by the employees. Findaway On June 15, 2022, the Group acquired 100% of Findaway World, LLC (“Findaway”), a digital audiobook distribution platform. The acquisition allows the Group to accelerate its audiobook content offering. The fair value of the purchase consideration was €117 million in cash, paid at closing. The acquisition was accounted for under the acquisition method. The provisional purchase price allocation to assets acquired and liabilities assumed in the acquisition are as follows: (in € millions) Cash and cash equivalents 8 Trade and other receivables 11 Other current assets 15 Intangible assets 22 Trade and other payables (11) Accrued expenses and other liabilities (13) Total identifiable net assets 32 Goodwill 85 Fair value of net assets acquired 117 The Group incurred €5 million in acquisition-related costs that 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 expected future synergies and the technical expertise of the acquired workforce. The goodwill recorded is expected to be deductible for tax purposes. The goodwill was allocated to the Premium segment. The intangible assets acquired relate to existing technology, trade name and publisher relationships. The useful lives of the existing technology and trade name are five years each, and the useful life of the publisher relationships is seven years. The Group valued the existing technology and trade name using the relief from royalty method, under the income approach. The Group valued the publisher relationships using the multi-period excess earnings method, under the income approach. In addition to the purchase consideration, there are cash payments of €13 million that are contingent on the continued employment of certain employees. In addition, €5 million of equity instruments were offered to and accepted by certain employees, which have vesting conditions contingent upon continued employment and are accounted for as equity-settled share-based compensation transactions. These cash payments and share-based compensation transactions are recognized as post-combination expense over employment service periods of up to four years, if not forfeited by the employees. Podsights and Chartable During February 2022, the Group acquired 100% of In Defense of Growth Inc. ("Podsights") and Chartable Holding, Inc. ("Chartable") to provide improved podcast ad measurement and analytics services. These acquisitions allow the Group to expand and scale its podcast monetization and product offering for advertisers and publishers. The combined fair value of the purchase consideration for the two acquisitions was €83 million in cash, paid at closing. The acquisitions were accounted for under the acquisition method. Of the total purchase consideration, €59 million has been recorded to goodwill, €26 million to acquired intangible assets, €4 million to cash and cash equivalents, €1 million to other tangible net assets, and €7 million to deferred tax liabilities. The Group incurred €2 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 expected future synergies and technical expertise of the acquired workforce. None of the goodwill recorded is expected to be deductible for tax purposes. The goodwill was allocated to the Ad-Supported segment. The intangible assets acquired relate to existing technology and customer relationships. The useful lives of existing technology ranges from three In addition to the purchase consideration, there are cash payments of €21 million that are contingent on the continued employment of certain employees. In addition, €10 million of equity instruments were offered to and accepted by certain employees, which have vesting conditions contingent on continued employment and are accounted for as equity-settled share-based compensation transactions. These cash payments and share-based compensation transactions are recognized as post-combination expense over employment service periods of up to four years, if not forfeited by the employees. For the year ended December 31, 2022, revenues and operating results of the acquired businesses were not significant to the Group's consolidated statement of operations. |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of operating segments [abstract] | |
Segment information | Segment informationThe Group has two reportable segments: Premium and Ad-Supported. Revenue for the Premium segment is generated primarily through subscription fees. Revenue for the Ad-Supported segment is primarily generated through the sale of advertising across the Group's music and podcast content. Royalty costs are primarily recorded in each segment based on specific rates for each segment agreed to with rights holders. All podcast content costs are recorded in the Ad-Supported segment. The remaining costs that are not specifically associated to either of the segments are allocated based on user activity or the revenue recognized in each 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/(loss) are as follows: 2022 2021 2020 (in € millions) Premium Revenue 10,251 8,460 7,135 Cost of revenue 7,355 5,986 5,126 Gross profit 2,896 2,474 2,009 Ad-Supported Revenue 1,476 1,208 745 Cost of revenue 1,446 1,091 739 Gross profit 30 117 6 Consolidated Revenue 11,727 9,668 7,880 Cost of revenue 8,801 7,077 5,865 Gross profit 2,926 2,591 2,015 Reconciliation of segment 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)/income before tax is as follows: 2022 2021 2020 (in € millions) Segment gross profit 2,926 2,591 2,015 Research and development (1,387) (912) (837) Sales and marketing (1,572) (1,135) (1,029) General and administrative (626) (450) (442) Finance income 421 246 94 Finance costs (132) (91) (510) (Loss)/income before tax (370) 249 (709) Revenue by country 2022 2021 2020 (in € millions) United States 4,712 3,692 2,947 United Kingdom 1,113 994 836 Luxembourg 7 6 5 Other countries 5,895 4,976 4,092 Total 11,727 9,668 7,880 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 delivered. 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 consist of property and equipment and lease right-of-use assets. 2022 2021 2020 (in € millions) Sweden 142 148 151 United States 529 549 504 Other countries 94 112 102 Total 765 809 757 As of December 31, 2022, 2021, and 2020, the Group held no property and equipment in Luxembourg. |
Personnel expenses
Personnel expenses | 12 Months Ended |
Dec. 31, 2022 | |
Classes of employee benefits expense [abstract] | |
Personal expenses | Personnel expenses 2022 2021 2020 (in € millions, except Wages and salaries 1,233 860 694 Social costs and payroll taxes 85 85 265 Contributions to retirement plans 51 40 32 Share-based compensation 381 223 176 Other employee benefits 150 124 97 Total 1,900 1,332 1,264 Average full-time employees 8,359 6,617 5,584 |
Auditor remuneration
Auditor remuneration | 12 Months Ended |
Dec. 31, 2022 | |
Auditor's remuneration [abstract] | |
Auditor remuneration | Auditor remuneration 2022 2021 2020 (in € millions) Auditor fees 7 6 5 |
Finance income and costs
Finance income and costs | 12 Months Ended |
Dec. 31, 2022 | |
Finance Income And Costs [Abstract] | |
Finance income and costs | Finance income and costs 2022 2021 2020 (in € millions) Finance income Fair value movements on derivative liabilities (Note 24) 71 53 49 Fair value movements on Exchangeable Notes (Note 24) 159 117 — Interest income 47 11 17 Other financial income 13 6 8 Foreign exchange gains 131 59 20 Total 421 246 94 Finance costs Fair value movements on derivative liabilities (Note 24) — (5) (307) Fair value movements on Exchangeable Notes (Note 24) (15) (5) — Interest expense on lease liabilities (41) (40) (41) Interest, bank fees and other costs (17) (11) (13) Transaction costs in relation to issuance of Exchangeable Notes — (18) — Foreign exchange losses (59) (12) (149) Total (132) (91) (510) |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Income Tax [Abstract] | |
Income tax | Income tax An analysis of the Group’s income tax expense/(benefit) for periods presented is set out below: 2022 2021 2020 (in € millions) Current tax expense Current year 82 37 25 Changes in estimates in respect to prior year 13 2 (9) 95 39 16 Deferred tax (benefit)/expense Temporary differences (158) 5 (137) Change in recognition of deferred tax 124 241 (7) Change in tax rates — (1) — Changes in estimates in respect to prior years (1) (1) — (35) 244 (144) Income tax expense/(benefit) 60 283 (128) For the years ended December 31, 2022, 2021, and 2020, the Group recorded an income tax expense/(benefit) of €26 million, €(268) million, and €163 million, respectively, in other comprehensive income/(loss) related to components of other comprehensive income/(loss). In 2022, a €(5) million current tax benefit (2021, €30 million of a current tax charge) was reclassified to accumulated deficit relating to the sale of a long term investment. In 2022, the Group recognized current income tax expense of €5 million for uncertain tax positions and has cumulatively recorded liabilities of €9 million for uncertain tax positions at December 31, 2022, of which €2 million is reasonably expected to be resolved within 12 months. Interest and penalties included in income tax expense were not material in any of the periods presented. A reconciliation between the income tax expense/(benefit) for the year, and the theoretical tax expense that would arise when applying the statutory tax rate in Luxembourg of 24.94% to the consolidated loss before tax for each of the years ended December 31, 2022, 2021, and 2020 is shown in the table below: 2022 2021 2020 (in € millions) (Loss)/income before tax (370) 249 (709) Tax using the Luxembourg tax rate (93) 62 (177) Effect of tax rates in foreign jurisdictions (11) 1 12 Permanent differences 23 (35) 54 Change in unrecognized deferred taxes 124 239 (9) Adjustments in respect of previous years 12 1 (9) Foreign withholding taxes 2 12 1 Other 3 3 — Income tax expense/(benefit) 60 283 (128) The Group will be subject to 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: 2022 2021 (in € millions) Intangible assets (70) (66) Share-based compensation 18 8 Tax losses carried forward 93 53 Property and equipment 50 58 Unrealized (gains)/losses (130) (43) Trade and other payables 29 1 Other 13 2 Net deferred tax assets 3 13 A reconciliation of net deferred tax is shown in the table below: 2022 2021 2020 (in € millions) At January 1 13 15 7 Movement recognized in consolidated statement of 36 (240) 144 Movement recognized in consolidated statement of (32) 239 (136) Movement due to acquisition (14) (1) — At December 31 3 13 15 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 2022 2021 (in € millions) Deferred tax assets 8 13 Deferred tax liabilities 5 — 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 entities within the Group can use the benefits. 2022 2021 (in € millions) Intangible assets 22 74 Share-based compensation 3 122 Tax losses carried forward 329 316 Tax credits carried forward 80 51 Capitalized Research & Development Costs 106 — Unrealized (gains)/ losses — 7 Other 58 60 Total 598 630 At December 31, 2022, no deferred tax liability had been recognized on investments in subsidiaries because the Company has concluded it has the ability and intention to control the timing of any distribution from its subsidiaries. There are no distributions planned in the foreseeable future. It is not practicable to calculate the unrecognized deferred tax liability on investments in subsidiaries. Tax loss and credit carry-forwards as at December 31, 2022 were expected to expire as follows: Expected expiry 2023 - 2032 2033 and onwards Unlimited Total (in € millions) Tax loss carry-forwards 101 437 1,596 2,134 Research and development credit carry-forward — 80 — 80 The Group has significant net operating loss carry-forwards in Luxembourg of €195 million, as well as foreign jurisdictions including the United States of €462 million (€214 million federal and €248 million state and local), Sweden of €1,359 million and other foreign jurisdictions of €118 million. 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 the United States, of the €214 million federal net operating loss carryforwards, €24 million are subject to an annual limitation as defined by Section 382 of the Internal Revenue Code (“Section 382”). The remaining balance is related to net operating losses generated after January 1, 2018 which can be carried forward indefinitely but are subject to an 80% taxable income limitation upon utilization. In addition, utilization of these net operating loss carry-forwards may be subject to further annual limitation if there is an ownership change within the meaning of Section 382. Such an ownership change may limit the amount of net operating loss carry-forwards that can be utilized to offset future taxable income. In Sweden, our net operating losses can be carried forward indefinitely. 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. 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 U.S. and other foreign tax authorities for tax years from 2013-2020. These examinations may lead to adjustments to the Group’s taxes. The Group has initiated and is in negotiations for 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, 2022 | |
Earnings per share [abstract] | |
Loss per share | Loss per shareBasic 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 outstanding ordinary shares during the period. Potential ordinary shares which are based on the weighted-average ordinary shares underlying outstanding stock options, restricted stock units, and other contingently issuable shares, warrants, and Exchangeable Notes and computed using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted loss per share when their effect is dilutive. The computation of loss per share for the respective periods is as follows: 2022 2021 2020 (in € millions, except share and per share data) Basic loss per share Net loss attributable to owners of the parent (430) (34) (581) Shares used in computation: Weighted-average ordinary shares outstanding 192,934,862 191,298,397 187,583,307 Basic loss per share attributable to owners of the parent (2.23) (0.18) (3.10) Diluted loss per share Net loss attributable to owners of the parent (430) (34) (581) Fair value gains on dilutive Exchangeable Notes (144) (112) — Fair value gains on dilutive warrants — (53) — Net loss used in the computation (574) (199) (581) Shares used in computation: Weighted-average ordinary shares outstanding 192,934,862 191,298,397 187,583,307 Exchangeable Notes 2,911,500 2,424,921 — Warrants — 220,137 — Diluted weighted average ordinary shares 195,846,362 193,943,455 187,583,307 Diluted loss per share (2.93) (1.03) (3.10) Potential dilutive securities that were not included in the diluted loss per share calculations because they would be anti-dilutive were as follows: 2022 2021 2020 Employee options 16,004,890 8,695,348 9,041,288 Restricted stock units 3,135,407 1,425,196 1,320,193 Other contingently issuable shares 71,717 108,720 156,190 Warrants 800,000 800,000 800,000 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Leases [Abstract] | |
Leases | LeasesThe Group leases certain properties under non-cancellable lease agreements that primarily relate to office space. The expected lease terms are up to 12 years. The Group currently does not act in the capacity of a lessor. Below is the roll-forward of lease right-of-use assets: Right of use assets (in € millions) Cost At January 1, 2021 581 Increases 23 Decreases (2) Exchange differences 30 At December 31, 2021 632 Increases 20 Exchange differences 23 At December 31, 2022 675 Accumulated depreciation At January 1, 2021 (137) Depreciation charge (53) Decreases 2 Exchange differences (7) At December 31, 2021 (195) Depreciation charge (59) Exchange differences (4) At December 31, 2022 (258) Cost, net accumulated depreciation At December 31, 2021 437 At December 31, 2022 417 Below is the roll-forward of lease liabilities: Lease liabilities 2022 2021 (in € millions) At January 1 623 608 Increases 20 23 Payments (1) (96) (85) Interest expense 41 40 Lease incentives received (1) 2 7 Increases in lease incentives receivable — (2) Exchange differences 23 32 At December 31 613 623 (1) Included within the consolidated statement of cash flows Below is the maturity analysis of lease liabilities: Lease liabilities December 31, 2022 Maturity Analysis (in € millions) Less than one year 98 One to five years 367 More than five years 376 Total lease commitments 841 Impact of discounting remaining lease payments (226) Lease incentives receivable (2) Total lease liabilities 613 Lease liabilities included in the consolidated Current 58 Non-current 555 Total 613 Excluded from the lease commitments above are short term leases. Expenses relating to short term leases were approximately €6 million and €7 million for the year ended December 31, 2022 and 2021, respectively. Additionally, the Group has entered into certain lease agreements with approximately €43 million of commitments, which had not commenced as of December 31, 2022, and as such, have not been recognized in the consolidated statement of financial position. |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of detailed information about property, plant and equipment [abstract] | |
Property and equipment | Property and equipment Property Leasehold Total (in € millions) Cost At January 1, 2021 56 346 402 Additions 26 55 81 Disposals (1) (1) (2) Exchange differences 2 22 24 At December 31, 2021 83 422 505 Additions 8 11 19 Disposals (1) — (1) Exchange differences 2 15 17 At December 31, 2022 92 448 540 Accumulated depreciation At January 1, 2021 (36) (53) (89) Depreciation charge (9) (32) (41) Disposals — 1 1 Exchange differences (1) (3) (4) At December 31, 2021 (46) (87) (133) Depreciation charge (15) (44) (59) Disposals 1 — 1 Exchange differences — (1) (1) At December 31, 2022 (60) (132) (192) Cost, net accumulated depreciation At December 31, 2021 37 335 372 At December 31, 2022 32 316 348 There were no impairment charges recognized for the year ended December 31, 2022 and 2021, respectively. The Group had €8 million and €4 million of leasehold improvements that were not placed into service as of December 31, 2022 and 2021, respectively. |
Goodwill and intangible assets
Goodwill and intangible assets | 12 Months Ended |
Dec. 31, 2022 | |
Intangible assets and goodwill [abstract] | |
Goodwill and intangible assets | Goodwill and intangible assets Internal Acquired Total Goodwill Total (in € millions) Cost At January 1, 2021 64 91 155 736 891 Additions 13 — 13 — 13 Acquisition, business combination (Note 5) — 7 7 106 113 Write-off of fully amortized intangible assets (13) — (13) — (13) Exchange differences — 7 7 52 59 At December 31, 2021 64 105 169 894 1,063 Additions 5 — 5 — 5 Acquisition, business combination (Note 5) — 82 82 221 303 Exchange differences — 6 6 53 59 At December 31, 2022 69 193 262 1,168 1,430 Accumulated amortization At January 1, 2021 (31) (27) (58) — (58) Amortization charge (15) (18) (33) — (33) Write-off of fully amortized intangible assets 13 — 13 — 13 Exchange differences — (2) (2) — (2) At December 31, 2021 (33) (47) (80) — (80) Amortization charge (17) (36) (53) — (53) Exchange differences — (2) (2) — (2) At December 31, 2022 (50) (85) (135) — (135) Cost, net accumulated amortization At December 31, 2021 31 58 89 894 983 At December 31, 2022 19 108 127 1,168 1,295 Amortization charges related to intangible assets of €40 million, €25 million and €18 million in 2022, 2021, and 2020, respectively, are included in research and development in the consolidated statement of operations. There were no impairment charges for goodwill in 2022, 2021, and 2020, respectively. We recorded immaterial impairment charges for intangible assets in 2022. There were no impairment charges for intangible assets in 2021 and 2020, respectively. 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 each of the segments that are 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 2022 2022 2021 2021 (in € millions) Goodwill 274 894 129 765 Valuation methodology The Group performed its annual impairment test in the fourth quarter of 2022. The recoverable amount of the Premium and Ad-Supported operating segments are assessed using a fair value less costs of disposal (“FVLCD”) model. The FVLCD valuation is considered a level 3 in the fair value hierarchy, as it uses significant unobservable inputs. FVLCD is calculated using both the income and market valuation methods. Ad-Supported segment For the Ad-supported segment we used an income valuation method which involved discounting the projected cash flows to present value. We also used the Venture Capital method ("VC method") which is a hybrid of the income and market valuation methods. The VC method involved discounting cash flows and then applying observed market multiples of comparable publicly traded companies to the forecasted revenue based on an assumed future exit date within the forecast period. We weighted the income valuation method and VC method 50% and 50%, respectively. Premium segment For the Premium segment we used an income valuation method which involved discounting the projected cash flows to present value. We also used the market valuation method which involved applying multiples from comparable publicly traded companies to the revenue of the preceding and forecasted twelve months, before and after the date of the impairment test, respectively. We weighted the income valuation method and market valuation method 50% and 50%, respectively. 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 The key assumptions used in the income approach was the discount rate based on the weighted-average cost of capital. The discount rate was 11.0% and 13.0% for the Group’s Premium and Ad-Supported segments, respectively. The key assumptions used in the VC method and market valuation method 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. For the Ad-supported segment, we applied a revenue multiple of 1.4 to the forecasted twelve months revenue preceding the assumed exit date. For the Premium segment, we applied a revenue multiple of 1.5 and 1.6 to the preceding and forecasted twelve months revenue before and after the date of the impairment test, respectively. 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, 2022 | |
Disclosure Of Restricted Cash And Other Non Current Assets [Abstract] | |
Restricted cash and other non-current assets | Restricted cash and other non-current assets 2022 2021 (in € millions) Restricted cash Lease deposits and guarantees 53 51 Other 2 1 Other non-current assets 23 25 Total 78 77 |
Trade and other receivables
Trade and other receivables | 12 Months Ended |
Dec. 31, 2022 | |
Trade and other receivables [abstract] | |
Trade and other receivables | Trade and other receivables 2022 2021 (in € millions) Trade receivables 509 443 Less: allowance for expected credit losses (7) (6) Trade receivables – net 502 437 Other 188 184 Total 690 621 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: 2022 2021 (in € millions) Current 317 268 Overdue 1 – 30 days 91 86 Overdue 31 – 60 days 49 43 Overdue 60 – 90 days 19 17 Overdue more than 90 days 26 23 502 437 The movements in the Group’s allowance for expected credit losses are as follows: 2022 2021 (in € millions) At January 1 6 4 Provision for expected credit losses 8 7 Reversal of unutilized provisions (2) (2) Receivables written off (5) (3) At December 31 7 6 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. |
Other current assets
Other current assets | 12 Months Ended |
Dec. 31, 2022 | |
Other current assets [Abstract] | |
Other current assets | Other current assets 2022 2021 (in € millions) Content assets 187 161 Prepaid expenses and other 89 74 Derivative assets 31 11 Total 307 246 Content asset amortization of €193 million, €122 million, and €48 million is included in cost of revenue in the consolidated statement of operations for the year ended December 31, 2022, 2021, and 2020, respectively. |
Issued share capital and other
Issued share capital and other reserves | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of classes of share capital [abstract] | |
Issued share capital and other reserves | Issued share capital and other reserves As of each of December 31, 2022, 2021, and 2020, the authorized and subscribed share capital was comprised of 403,032,520 shares, at a par value €0.000625 each. As at December 31, 2022, 2021, and 2020, the Company had 196,858,811, 195,614,910, and 193,614,910 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 certain directors and 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. Our shareholders have authorized the issuance of up to 1,400,000,000 beneficiary certificates to shareholders of the Company without reserving to our existing shareholders a preemptive right to subscribe for the beneficiary certificates issued in the future. Pursuant to our articles of association, our beneficiary certificates may be issued at a ratio of between one and 20 beneficiary certificates per ordinary share as determined by our board of directors or its delegate at the time of issuance. We have issued ten beneficiary certificates per ordinary share issued by us and held of record to entities beneficially owned by our founders, Daniel Ek and Martin Lorentzon, for a total of 349,876,040 and 350,514,260 beneficiary certificates outstanding as of December 31, 2022 and 2021, respectively. The beneficiary certificates carry no economic rights and are issued to provide the holders of such certificates additional voting rights. Each beneficiary certificate entitles its holder to one vote. 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. On July 13, 2017, the Company issued, for €9 million in cash, a warrant to acquire 1,600,000 ordinary shares to Mr. Ek, through D.G.E. Investments Limited. 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. On July 13, 2020, the Company issued 1,084,043 ordinary shares and 10,840,430 beneficiary certificates upon the effective net settlement of all 1,600,000 outstanding warrants that were granted on July 13, 2017. 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. 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 expired unexercised on July 1, 2022. On August 23, 2021, the Company issued, for €31 million, warrants to acquire 800,000 ordinary shares to Mr. Ek, through D.G.E. Investments Limited. The exercise price of each warrant is US $281.63, 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 August 23, 2024. On August 20, 2021, the Company announced that the board of directors had approved a program to repurchase up to $1.0 billion of the Company’s ordinary shares. Repurchases of up to 10,000,000 of the Company’s ordinary shares were authorized at the Company’s general meeting of shareholders on April 21, 2021. The repurchase program will expire on April 21, 2026. Since the commencement of this repurchase program and through December 31, 2022, the Company repurchased 469,274 shares for €91 million under this program. The authorization of the previous share repurchase program, announced on November 5, 2018, expired on April 21, 2021. The total aggregate amount of repurchased shares under that program was 4,366,427 for a total of approximately €510 million. 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, 2022 and 2021, the Company repurchased, in total, 1,209,040 and 2,458,324 of its own ordinary shares, respectively, and reissued 1,106,597 and 2,397,198 treasury shares, respectively, upon the exercise of stock options, restricted stock units, and contingently issuable shares. As of December 31, 2022 and 2021, the Company had 3,565,542 and 3,463,099 ordinary shares held as treasury shares, respectively. Other reserves 2022 2021 2020 (in € millions) Currency translation At January 1 17 (54) (11) Currency translation 83 71 (43) At December 31 100 17 (54) Short term investments At January 1 (3) 5 1 (Losses)/gains on fair value that may be subsequently reclassified (23) (8) 8 Gains reclassified to consolidated statement of operations 4 (2) (3) Deferred tax 4 2 (1) At December 31 (18) (3) 5 Long term investments At January 1 (26) 1,059 444 (Losses)/gains on fair value not to be subsequently reclassified 212 (1,218) 777 Losses/(gains) on sale of long term investment reclassified to accumulated deficit 2 (134) — Tax effect of gains on sale of long term investment reclassified to accumulated deficit (5) 30 — Deferred tax (22) 237 (162) At December 31 161 (26) 1,059 Exchangeable Notes At January 1 — — — Gains on fair value attributable to changes in credit risk 4 — — Deferred tax (1) — — At December 31 3 — — Cash flow hedges At January 1 (4) (3) (4) (Losses)/gains on fair value that may be subsequently reclassified 4 (11) 5 Losses/(gains) reclassified to revenue 32 51 (15) (Gains)/losses reclassified to cost of revenue (20) (40) 11 Deferred tax (2) (1) — At December 31 10 (4) (3) Share-based compensation At January 1 869 680 494 Share-based compensation (Note 19) 385 222 181 Income tax impact associated with share-based compensation (Note 10) 51 21 34 Restricted stock units withheld for employee taxes (40) (54) (29) At December 31 1,265 869 680 Other reserves at December 31 1,521 853 1,687 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 Other Comprehensive Income (“OCI”). Long term investment reserve recognizes the unrealized fair value gains and losses on equity instruments held at fair value through OCI. Exchangeable Notes reserve recognizes the change in fair value gains and losses that is attributable to changes in the Group's own credit risk on Exchangeable Notes which are designated at fair value through profit and loss. Cash flow hedge reserve recognizes the unrealized gains and losses on the effective portion of foreign exchange forward contracts designated for hedging. Share-based compensation 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 19. |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Share Based Payments [Abstract] | |
Share-based compensation | Share-based compensation Stock Option Plans During 2020 and 2021, the Company implemented new Employee Stock Option Plans (“ESOP”) and Director Stock Option Plans (together, the “Stock Options Plans”). Under the Stock Option Plans, stock options of the Company are granted to certain employees of the Group and members of its board of directors. For options granted under the Stock Option 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 exercise price for options is payable in the EUR value of a fixed USD amount; therefore, the Group considers these options to be USD-denominated. The options granted to participants under the Stock Option Plans have a first vesting period of three Restricted Stock Unit Program During 2020 and 2021, the Company implemented new restricted stock unit (“RSU”) programs for employees and for members of its board of directors (together, the “RSU Plans”). The RSU Plans are accounted for as equity-settled share-based compensation 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 RSU Plans have a first vesting period of three 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 acquiree. Vesting of the RSAs is contingent upon continued employment of these employees. The awards are accounted for as equity-settled share-based compensation transactions. The RSAs vest over a two In connection with the acquisition of Anchor during 2019 and The Ringer during 2020, the Company granted 162,320 and 34,450 equity instruments to certain employees of Anchor and The Ringer, respectively. 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 and five-year period, respectively, from the acquisition date, and vesting of the instruments is contingent on continued employment. The instruments are accounted for as equity-settled share-based compensation 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 granted to certain employees of Anchor and The Ringer was US $145.21 and US$145.14, respectively. In connection with the acquisition of Podsights during 2022, the Company granted 30,824 equity instruments to certain employees of Podsights. The instruments vest annually over a four-year period from the acquisition date and the vesting is contingent upon 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 for each equity instrument granted to employees of Podsights was US $162.21. Activity in the Group's RSUs, RSAs, and other contingently issuable shares outstanding and related information is as follows: RSUs RSAs Other Number of Weighted Number of Weighted Number of Weighted US$ US$ US$ Outstanding at January 1, 2020 638,350 134.79 41,280 90.65 162,320 145.21 Granted 1,127,149 161.50 — — 34,450 145.14 Forfeited (91,613) 143.13 — — — — Released (353,693) 138.66 (41,280) 90.65 (40,580) 145.21 Outstanding at December 31, 2020 1,320,193 155.98 — — 156,190 145.19 Granted 793,337 277.21 — — 22,988 261.00 Forfeited (175,751) 190.26 — — — — Released (512,583) 178.19 — — (70,458) 182.98 Outstanding at December 31, 2021 1,425,196 211.25 — — 108,720 145.19 Granted 2,914,248 121.42 — — 30,824 162.21 Forfeited (359,238) 173.04 — — (20,357) 145.21 Released (844,799) 173.76 — — (47,470) 145.20 Outstanding at December 31, 2022 3,135,407 142.23 — — 71,717 152.50 In the table above, the number of RSUs and other contingently issuable shares 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 Weighted US$ Outstanding at January 1, 2020 12,153,772 107.68 Granted 2,356,040 180.12 Forfeited (855,051) 131.30 Exercised (4,556,908) 78.87 Expired (56,565) 146.69 Outstanding at December 31, 2020 9,041,288 138.60 Granted 2,164,070 315.86 Forfeited (414,317) 191.43 Exercised (2,074,572) 96.12 Expired (21,121) 196.25 Outstanding at December 31, 2021 8,695,348 190.19 Granted 9,640,611 141.55 Forfeited (1,332,946) 215.07 Exercised (620,143) 78.33 Expired (377,980) 130.86 Outstanding at December 31, 2022 16,004,890 164.56 Exercisable at December 31, 2020 4,022,571 113.91 Exercisable at December 31, 2021 4,453,983 152.64 Exercisable at December 31, 2022 6,402,109 172.69 The weighted-average contractual life for the stock options outstanding at December 31, 2022, 2021, and 2020 is 3.3 years, 2.7 years, and 2.9 years, respectively. The weighted-average share price at exercise for options exercised during 2022, 2021, and 2020 was US $158.59, US $280.08, and US $198.10, respectively. The weighted-average fair value of options granted during the year ended at December 31, 2022, 2021, and 2020 was US $43.56 per option, US $78.65 per option, and US $36.82 per option, and, respectively. The stock options outstanding at December 31, 2022, 2021, and 2020 are comprised of the following: 2022 2021 2020 Range of exercise prices (US$) Number of Weighted Number of Weighted Number of Weighted 7.59 to 45.00 2,289 1.1 3,533 1.8 195,207 0.3 45.01 to 90.00 1,147,396 4.8 415,340 0.2 1,243,833 1.2 90.01 to 135.00 4,036,371 3.3 1,659,359 1.8 2,234,257 2.7 135.01 to 180.00 6,741,590 3.1 3,076,253 2.5 3,671,417 3.5 180.01 to 498.98 4,077,244 3.0 3,540,863 3.7 1,696,574 3.6 16,004,890 3.3 8,695,348 2.7 9,041,288 2.9 In determining the fair value of the stock options, 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 stock options for the years ended December 31, 2022, 2021, and 2020: 2022 2021 2020 Expected volatility (%) 35.9 – 60.0 34.1 – 43.1 30.0 – 42.8 Risk-free interest rate (%) 0.9 – 4.5 0.2 – 1.1 0.1 – 1.7 Expected life of stock options (years) 2.6 – 4.8 2.6 – 4.8 2.6 – 4.8 Weighted-average share price (US$) 124.47 283.15 162.82 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 compensation 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 2022. The following table shows the impact of these changes on stock option expense for the options granted in 2022: 2022 (in € millions) Actual stock option expense 142 Stock option expense increase/(decrease) under the following Volatility decreased by 10% (25) Volatility increase by 10% 34 Expected life decrease by 1 year (19) Expected life increase by 1 year 24 The expense recognized in the consolidated statement of operations for share-based compensation is as follows: 2022 2021 2020 (in € millions) Cost of revenue 8 9 8 Research and development 218 119 84 Sales and marketing 73 41 34 General and administrative 82 54 50 Total 381 223 176 |
Exchangeable Notes
Exchangeable Notes | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Borrowings [Abstract] | |
Exchangeable Notes | Exchangeable Notes On March 2, 2021, the Company’s wholly owned subsidiary, Spotify USA Inc. (the “Issuer”), issued US $1,500 million aggregate principal amount of 0% Exchangeable Senior Notes due 2026 (the “Exchangeable Notes”), which included the initial purchasers’ exercise in full of their option to purchase an additional US $200 million principal amount of the Exchangeable Notes. The Exchangeable Notes will mature on March 15, 2026, unless earlier repurchased, redeemed or exchanged. The Exchangeable Notes are fully and unconditionally guaranteed, on a senior, unsecured basis by the Company. The net proceeds from the issuance of the Exchangeable Notes were €1,223 million after deducting transaction costs of €18 million. The transaction costs were immediately expensed and included in finance costs in the consolidated statement of operations. The Exchangeable Notes are the Issuer’s senior unsecured obligations and are equal in right of payment with the Issuer's future senior, unsecured indebtedness, senior in right of payment to the Issuer’s future indebtedness that is expressly subordinated to the Exchangeable Notes and effectively subordinated to the Issuer’s future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The Exchangeable Notes will be structurally subordinated to all future indebtedness and other liabilities, including trade payables, and (to the extent the Issuer is not a holder thereof) preferred equity, if any, of the Issuer’s subsidiaries. The noteholders may exchange their Exchangeable Notes at their option into consideration that consists, at the Issuer’s election, of cash, ordinary shares of the Company, or a combination of cash and ordinary shares, but only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per ordinary share exceeds 130% of the exchange price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of Exchangeable Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per ordinary share on such trading day and the exchange rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the ordinary shares as set forth in the indenture governing the Exchangeable Notes (the “Indenture”); (4) if the Issuer calls such Exchangeable Notes for redemption; and (5) at any time from, and including, December 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date. The initial exchange rate is 1.9410 ordinary shares per US $1,000 principal amount of Exchangeable Notes, which represents an initial exchange price of approximately US $515.20 per ordinary share. The exchange rate and exchange price will be subject to customary adjustments upon the occurrence of certain events as set forth in the Indenture. In addition, if certain corporate events that constitute a make-whole fundamental change occur as set forth in the Indenture, then the exchange rate will, in certain circumstances, be increased for a specified period of time. The circumstances required to allow the noteholders to exchange their Exchangeable Notes were not met during the year ended December 31, 2022. The Exchangeable Notes will not be redeemable prior to March 20, 2024, except in the event of certain tax law changes as set forth in the Indenture. The Exchangeable Notes will be redeemable, in whole or in part, at the Issuer’s option at any time, and from time to time, on or after March 20, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Exchangeable Notes to be redeemed, plus accrued and unpaid special and additional interest, if any, but only if the last reported sale price per ordinary share exceeds 130% of the exchange price on: (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Issuer sends the related redemption notice; and (2) the trading day immediately before the date the Issuer sends such notice. In addition, the Issuer will have the right to redeem all, but not less than all, of the Exchangeable Notes if certain changes in tax law as set forth in the Indenture occur. In addition, calling any Exchangeable Note for redemption will constitute a make-whole fundamental change with respect to that Exchangeable Note, in which case the exchange rate applicable to the exchange of that Exchangeable Note will be increased in certain circumstances if it is exchanged after it is called for redemption. Upon the occurrence of a “fundamental change” as set forth in the Indenture, noteholders may require the Issuer to repurchase their Exchangeable Notes at a cash repurchase price equal to the principal amount of the Exchangeable Notes to be repurchased, plus accrued and unpaid special and additional interest, if any, to, but excluding, the fundamental change repurchase date as set forth in the Indenture. The Group accounted for the Exchangeable Notes at fair value through profit and loss using the fair value option in accordance with IFRS 9, Financial Instruments. Under this approach, the Exchangeable Notes are accounted for in their entirety at fair value, with any change in fair value after initial measurement being recorded in finance income or cost in the consolidated statement of operations, except that changes in fair value that are due to changes in own credit risk are presented separately in other comprehensive (loss)/income and will not be reclassified to the consolidated statement of operations. The fair value of the Exchangeable Notes as of December 31, 2022 was €1,128 million. See Note 24 for information regarding the key inputs and assumptions used to estimate the fair value of the Exchangeable Notes. |
Trade and other payables
Trade and other payables | 12 Months Ended |
Dec. 31, 2022 | |
Trade and other payables [abstract] | |
Trade and other payables | Trade and other payables 2022 2021 (in € millions) Trade payables 588 534 Value added tax and sales taxes payable 244 229 Other current liabilities 13 30 Total 845 793 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, 2022 | |
Disclosure Of Accrued Expenses And Other Liabilities [Abstract] | |
Accrued expenses and other liabilities | Accrued expenses and other liabilities 2022 2021 (in € millions) Non-current Other accrued liabilities 28 37 Total 28 37 Current Accrued fees to rights holders 1,665 1,378 Accrued salaries, vacation, and related taxes 120 92 Accrued social costs for options and RSUs 7 84 Accrued operating liabilities 194 188 Other accrued expenses 107 99 Total 2,093 1,841 |
Provisions
Provisions | 12 Months Ended |
Dec. 31, 2022 | |
Provisions [abstract] | |
Provisions | Provisions Legal Indirect tax Onerous Other Total (in € millions) Carrying amount at January 1, 2021 4 11 1 6 22 Charged/(credited) to the consolidated statement of operations: Additional provisions — 4 12 1 17 Reversal of unutilized amounts — (6) (2) — (8) Utilized — (1) (1) — (2) Carrying amount at December 31, 2021 4 8 10 7 29 Charged/(credited) to the consolidated statement of operations: Additional provisions 6 4 19 — 29 Reversal of unutilized amounts — (4) (2) (1) (7) Exchange differences 1 1 1 — 3 Utilized (1) (1) (23) — (25) Carrying amount at December 31, 2022 10 8 5 6 29 As at December 31, 2021 Current portion 4 8 6 4 22 Non-current portion — — 4 3 7 As at December 31, 2022 Current portion 10 8 5 3 26 Non-current portion — — — 3 3 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. As of April 2019, the Group's settlement of the Ferrick et al. v. Spotify USA Inc. , No. 1:16-cv-8412-AJN (S.D.N.Y.), putative class action lawsuit, which alleged that the Group unlawfully reproduced and distributed musical compositions without obtaining licenses, was final and effective. Even with the effectiveness of the settlement, we may still be subject to claims of copyright infringement by rights holders who have purported to opt out of the settlement or who may not otherwise be covered by its terms. The Music Modernization Act of 2018 contains a limitation of liability with respect to such lawsuits filed on or after January 1, 2018. Rights holders may, nevertheless, file lawsuits, and may argue that they should not be bound by this limitation of liability. For example, in August 2019, the Eight Mile Style, LLC et al v. Spotify USA Inc. , No. 3:19-cv-00736-AAT, lawsuit was filed against us in the U.S. District Court for the Middle District of Tennessee, alleging both that the Group does not qualify for the limitation of liability in the Music Modernization Act and that the limitation of liability is unconstitutional and, thus, not valid law. The Group intends to vigorously defend this lawsuit, including plaintiffs' challenges to the limitation of liability in the Music Modernization Act. Indirect tax The Group has indirect tax provisions that 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. Onerous contracts Onerous contracts represent contracts where the unavoidable cost of meeting the obligations exceeds the expected revenue. Other |
Financial risk management and f
Financial risk management and financial instruments | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of detailed information about financial instruments [abstract] | |
Financial risk management and financial instruments | Financial risk management and financial instruments 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 which is 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. 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, Exchangeable Notes, and equity) 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. We have never declared or paid any cash dividends on our share capital, and we do not expect to pay dividends or other distributions on our ordinary shares in the foreseeable future. On November 5, 2018, the Company announced a share repurchase program beginning in the fourth quarter of 2018 which expired on April 21, 2021. The total aggregate amount of repurchased shares under that program was 4,366,427 for a total of approximately €510 million. On August 20, 2021, the Company announced that the board of directors had approved a program to repurchase up to $1.0 billion of the Company’s ordinary shares. Repurchases of up to 10,000,000 of the Company’s ordinary shares were authorized at the Company’s general meeting of shareholders on April 21, 2021. The repurchase program will expire on April 21, 2026. An aggregate of 469,274 ordinary shares for €91 million has been repurchased since the commencement of the share repurchase program through December 31, 2022. 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 Company’s capital allocation strategy of prioritizing investment to grow the business over the long term. 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 Company 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 with respect to cash and cash equivalents and short term investments 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 investments (classified as cash and cash equivalents and short term investments) within 90 days. At December 31, 2022 and 2021, the financial credit risk was equal to the consolidated statement of financial position value of cash and cash equivalents and short term investments of €3,350 million and €3,500 million, respectively. No credit losses were incurred during 2022 or 2021 on these 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. 2022 2021 (in € millions) Liquidity Short term investments 867 756 Cash equivalents 1,836 1,970 Cash at bank and on hand 647 774 Liquidity position 3,350 3,500 Cash equivalents include investments in money market funds measured at fair value and classified as level 1 financial instruments in the fair value hierarchy. 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 income/loss before tax of a 10% strengthening in the closing exchange rate of significant currencies to which the Group had exposure, at December 31, 2022 and 2021. The impact on net income/loss before tax 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. 2022 Swedish krona British pound U.S. dollar (in € millions) (Increase)/decrease in loss before tax (13) (18) 68 2021 Swedish krona British pound U.S. dollar (in € millions) (Increase)/decrease in income before tax (14) (8) 94 (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 €140 million and €126 million if the Euro weakened by 10% against all translation exposure currencies, based on the exposure at December 31, 2022 and 2021, 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. The Group’s exposure to interest rate risk is related to its interest-bearing assets, including its cash and cash equivalents and 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 we 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 €36 million and €35 million for the years ended December 31, 2022 and 2021, respectively. Financing risk management The Group finances its operations through external borrowings, equity offerings, and cash flow from operations. The funding strategy has been to diversify funding sources. The external debt consisted of the Exchangeable Notes and lease liabilities. 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 Exchangeable Notes and warrants. Both the Exchangeable Notes and 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. All else being equal, an increase or decrease of share price will increase or decrease the value of both the Exchangeable Notes and 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 €1 million and €18 million at December 31, 2022 and December 31, 2021, 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 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. The notional principal of foreign exchange contracts hedging the revenue and cost of revenue line items in the consolidated statement of operations was approximately €1,214 million and €859 million respectively, as of December 31, 2022 and approximately €1,185 million and €835 million as of December 31, 2021, 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, 2022: Notional amount in foreign currency Australian dollar British pound Canadian dollar Norwegian krone Swedish krona U.S. dollar (in millions) Hedged line item in consolidated statement of operations Revenue 336 453 293 905 1,504 69 Cost of revenue 246 321 209 599 992 52 Total 582 774 502 1,504 2,496 121 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, 2021: Notional amount in foreign currency Australian dollar British pound Canadian dollar Norwegian krone Swedish krona U.S. dollar (in millions) Hedged line item in consolidated statement of operations Revenue 327 429 274 870 1,446 54 Cost of revenue 240 304 190 573 959 43 Total 567 733 464 1,443 2,405 97 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, 2022 (in € millions) Financial assets at fair value Cash equivalents: Money market funds 1,543 — — 1,543 Time deposits 293 — — 293 Short term investments: Money market funds 125 — — 125 Government securities 245 5 — 250 Corporate notes — 309 — 309 Fixed income funds 183 — — 183 Derivatives (designated for hedging): Foreign exchange forwards — 31 — 31 Long term investments 1,095 — 43 1,138 Total financial assets at fair value by level 3,484 345 43 3,872 Financial liabilities at fair value Exchangeable Notes — — 1,128 1,128 Derivatives (not designated for hedging): Warrants — — 1 1 Derivatives (designated for hedging): Foreign exchange forwards — 20 — 20 Total financial liabilities at fair value by level — 20 1,129 1,149 Financial assets and liabilities by fair value hierarchy level Level 1 Level 2 Level 3 December 31, 2021 (in € millions) Financial assets at fair value Cash equivalents Money market funds 1,970 — — 1,970 Short term investments: Money market funds 25 — — 25 Government securities 204 18 — 222 Corporate notes — 308 — 308 Collateralized reverse purchase agreements — 67 — 67 Fixed income funds 134 — — 134 Derivatives (designated for hedging): Foreign exchange forwards — 11 — 11 Long term investments 852 — 64 916 Total financial assets at fair value by level 3,185 404 64 3,653 Financial liabilities at fair value Exchangeable Notes — — 1,202 1,202 Derivatives (not designated for hedging): Warrants — — 72 72 Derivatives (designated for hedging): Foreign exchange forwards — 17 — 17 Contingent consideration — — 17 17 Total financial liabilities at fair value by level — 17 1,291 1,308 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, 2022 and 2021 there were no transfers between levels in the fair value hierarchy. 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/(loss). The fair value of ordinary shares of TME is based on the ending New York Stock Exchange American depository share price. The fair value of the investment in TME 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: 2022 2021 2020 (in € millions) At January 1 852 2,228 1,481 Changes in fair value recorded in other comprehensive income/(loss) 242 (1,376) 747 At December 31 1,094 852 2,228 A 10% decrease or increase in TME's share price would have resulted in a fair value of the Group's long term investment in TME ranging from €985 million to €1,204 million at December 31, 2022 and €767 million to €937 million at December 31, 2021. The following sections describe the valuation methodologies the Group uses to measure its Level 3 financial instruments at fair value on a recurring basis. Warrants 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. On July 13, 2020, the Company issued 1,084,043 ordinary shares to Mr. Ek, through D.G.E. Investments Limited, upon the effective net settlement of the 1,600,000 warrants that were granted on July 13, 2017. Refer to Note 26. 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. On July 1, 2022 the warrants expired unexercised. Refer to Note 26. On August 23, 2021, the Company issued, for €31 million, warrants to acquire 800,000 ordinary shares to Daniel Ek, the Company’s Chief Executive Officer, through D.G.E. Investments Limited, an entity indirectly wholly owned by him. The exercise price of each warrant is US $281.63, which was equal to 1.3 times the fair market value of ordinary shares on the date of issuance. The warrants are exercisable at any time through August 23, 2024. Refer to Note 26. The outstanding warrants are measured on a recurring basis in the consolidated statement of financial position and are Level 3 financial instruments recognized at fair value through the consolidated statement of operations. The warrants are valued using a Black-Scholes option-pricing model, which includes inputs determined from models that include the value of the Company’s ordinary shares, as determined above and additional assumptions used to estimate the fair value of the warrants in the option pricing model as follows: 2022 2021 2020 Expected term (years) 1.65 0.5 – 2.65 1.5 Risk free rate (%) 4.52 0.19 – 0.89 0.11 Volatility (%) 55.0 40.0 - 45.0 50.0 Share price (US$) 78.95 234.03 314.66 The table below presents the changes in the warrants liability: 2022 2021 2020 (in € millions) January 1 72 89 98 Issuance of warrant for cash — 31 — Issuance of shares upon exercise of, or net settlement of, warrants — — (267) Non cash changes recognized in profit or loss Changes in fair value recognized in consolidated statement of operations (74) (53) 263 Effect of changes in foreign exchange rates 3 5 (5) At December 31 1 72 89 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. A 10% decrease or increase in the Company's ordinary share price would have resulted in a fair value of the warrants ranging from €1 million to €2 million at December 31, 2022 and €52 million to €95 million at December 31, 2021. Long term investments – other The Group has interests in certain long term investments, the most significant of which is our equity investment in DistroKid, an independent digital music distribution service. These long term investments primarily represent unlisted equity securities carried at fair value through other comprehensive income/(loss). The fair values of these equity investments are generally determined using business enterprise values based on market transactions or by (i) applying market multiples to the projected financial performance and (ii) discounting the future value to its present value equivalent. The key assumptions used to estimate the fair value of these equity investments include market multiples of revenue or earnings before interest, income taxes, depreciation and amortization for benchmark companies used to estimate business enterprise value and discount rate. The fair value of the long term investments may vary over time and is subject to a variety of risks including: company performance, macroeconomic, regulatory, industry, USD to Euro exchange rate, and systemic risks of the overall equity markets. The table below presents the changes in the other long term investments: 2022 2021 2020 (in € millions) At January 1 64 49 16 Initial recognition of long term investment 3 2 9 Changes in fair value recorded in other comprehensive (loss)/income (25) 158 29 Changes in fair value recognized in consolidated statement of operations (1) (4) (4) Sale of long term investment — (144) — Effect of changes in foreign exchange rates 2 3 (1) At December 31 43 64 49 On October 1, 2021, the Group completed the sale of two-thirds of its equity interest in DistroKid. Proceeds from the sale were €144 million and the realized gain on the sale was €134 million. The after tax gain of €109 million has been reclassified from other comprehensive income/(loss) to accumulated deficit. See Note 18. Contingent consideration On April 1, 2019, the Group acquired Cutler Media, LLC ("Parcast"), a premier storytelling podcast studio. Included in the purchase price was €13 million related to the estimated fair value of contingent consideration. The contingent consideration was valued by the Group using a simulation of user engagement outcomes. The change in the fair value of the contingent consideration was recognized within general and administrative expenses in the consolidated statement of operations. The table below presents the changes in the contingent consideration liability: 2022 2021 2020 (in € millions) At January 1 17 30 27 Contingent consideration payments (17) (17) (7) Changes in fair value recognized in consolidated statement of operations — 2 13 Effect of changes in foreign exchange rates — 2 (3) At December 31 — 17 30 As of June 30, 2022, the contingent consideration was fully paid. Exchangeable Notes On March 2, 2021, the Company’s wholly owned subsidiary, Spotify USA Inc. issued US $1,500 million aggregate principal amount of 0% Exchangeable Notes due 2026, which included the initial purchasers’ exercise in full of their option to purchase an additional US $200 million principal amount of the Exchangeable Notes. The Exchangeable Notes will mature on March 15, 2026, unless earlier repurchased, redeemed or exchanged. The Exchangeable Notes are fully and unconditionally guaranteed, on a senior, unsecured basis by the Company. The table below presents the changes in the Exchangeable Notes: 2022 2021 (in € millions) At January 1 1,202 — Initial recognition — 1,232 Changes in fair value recognized in consolidated statement of operations (144) (112) Changes in fair value recorded in other comprehensive loss (4) — Effect of changes in foreign exchange rates 74 82 At December 31 1,128 1,202 The change in estimated fair value is recognized within finance income/(costs) in the consolidated statement of operations, excluding changes in fair value due to changes in the Group’s own credit risk, which are recognized in other comprehensive (loss)/income and will not be reclassified to the consolidated statement of operations. The fair value of the Exchangeable Notes was estimated using a combination of a binomial option pricing model and prices observed for the Exchangeable Notes in an over-the-counter market on the last trading day of the reporting period. A weight of 75% was applied to the binomial option pricing model and a weight of 25% was applied to the price of the Exchangeable Notes in the over-the-counter market on the last trading day of the reporting period. The key assumptions used in the binomial option pricing model for the Exchangeable Notes were as follows: 2022 2021 Risk free rate (%) 4.20 1.15 Discount rate (%) 7.0 3.9 Volatility (%) 45.0 40.0 Share price (US$) 78.95 234.03 A decrease or increase of 10 percentage points in volatility would have resulted in a fair value of the Exchangeable Notes ranging from €1,126 million to €1,132 million at December 31, 2022. A 10% decrease or increase in the Company's ordinary share price would have resulted in a fair value of the Exchangeable Notes ranging from €1,127 million to €1,129 million at December 31, 2022. A decrease or increase of 100 basis points in credit spread would have resulted in a fair value of the Exchangeable Notes ranging from €1,154 million to €1,102 million at December 31, 2022. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments And Contingencies [Abstract] | |
Commitments and contingencies | Commitments and contingencies Obligations under leases See Note 12 for lease obligations. 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: 2022 2021 2020 (in € millions) Not later than one year 1,111 788 317 Later than one year but not more than 5 years 298 2,491 3,259 Total 1,409 3,279 3,576 In addition, the Group is subject to various non-cancelable purchase obligations and service agreements with minimum spend commitments, including a service agreement with Google for the use of Google Cloud Platform and certain podcast and marketing commitments as at December 31: 2022 2021 2020 (in € millions) Not later than one year 485 362 279 Later than one year but not more than 5 years 334 435 619 More than 5 years 98 — — Total 917 797 898 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 relating to intellectual property, data protection, consumer protection, employment, and contractual rights. 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 August 11, 2020, the United States Court of Appeals for the D.C. Circuit issued an opinion which, as of the issuance of the formal “mandate” on October 26, 2020, vacated the Copyright Royalty Board’s determination of the royalty rates for applicable mechanical rights in the United States for calendar years 2018 to 2022. These rates apply both to compositions that we license under compulsory license pursuant to Section 115 of the Copyright Act of 1976 and to a number of direct licenses that we have had with music publishers. On July 1, 2022, the Copyright Royalty Board issued its initial ruling to set those rates in light of the D.C. Circuit’s opinion. That ruling will need to be adapted into regulations, which, when issued by the U.S. Copyright Office, will become law. Until the final rates are determined, our recorded royalty costs will be based on management estimates of the rates that will apply. The rates set by the Copyright Royalty Board are also subject to further change as part of future Copyright Royalty Board proceedings. Changes to these estimates could either benefit or adversely affect our results of operations and financial condition. In 2022, the proceedings known as “Phonorecords IV Proceedings” began to set the rates for the Section 115 compulsory license for calendar years 2023 to 2027. In August 2022, we and other services reached an agreement in principle with publisher organizations for rates and terms for U.S. mechanical royalties beginning in 2023 and asked the Copyright Royalty Board to adopt those rates and terms on an industry-wide basis. In December 2022, the Copyright Royalty Board issued final regulations adopting the parties' proposed rates and terms on an industry-wide basis for the Phonorecords IV period. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of transactions between related parties [abstract] | |
Related party transactions | Related party transactions 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. 2022 2021 2020 (in € millions) Key management compensation Short term employee benefits 6 4 5 Share-based compensation 37 26 30 Total 43 30 35 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. 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. On July 1, 2022 the warrants expired unexercised. On July 13, 2020, the Company issued 1,084,043 ordinary shares and 10,840,430 beneficiary certificates to Mr. Ek, through D.G.E. Investments Limited, upon the effective net settlement of the 1,600,000 warrants that were granted on July 13, 2017. On August 23, 2021, the Company issued, for €31 million, warrants to acquire 800,000 ordinary shares to Mr. Ek, through D.G.E. Investments Limited. The exercise price of each warrant is US $281.63, 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 August 23, 2024. During the years ended December 31, 2022, December 31, 2021, and December 31, 2020 the Company issued 1,198,000, 2,000,000, and 5,038,200 ordinary shares, respectively, 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 option exercises and restricted stock unit releases under the Company’s stock option and restricted stock unit plans. |
Group information
Group information | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of subsidiaries [abstract] | |
Group information | Group information The Company’s principal subsidiaries as at December 31, 2022 are as follows: Name Principal activities Proportion of Country of 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 Spain S.L. Sales, marketing and other support services 100 % Spain Spotify GmbH Sales, marketing and other support services 100 % Germany Spotify France SAS Sales, marketing and other support services 100 % France Spotify Canada Inc. Sales, marketing and other support services 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, distribution and marketing 100 % India S Servicios de Música México, S.A. de C.V. Sales and marketing 100 % Mexico Spotify Singapore Pte Ltd. Sales and marketing 100 % Singapore Spotify Italy S.r.l. Sales and marketing 100 % Italy There are no restrictions on the net assets of the Group companies. |
Events after reporting period
Events after reporting period | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of non-adjusting events after reporting period [abstract] | |
Events after the reporting period | Events after the reporting period On January 23, 2023, the Company announced a reduction in its employee base. We estimate that we will incur approximately €35 million to €45 million in severance-related charges. Subsequent to the end of the reporting period, we signed license agreements with certain music labels and publishers. Included in these agreements are minimum guarantee and spend commitments of approximately €116 million over the next three years. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Summary Of Significant Accounting Policies [Abstract] | |
Basis of preparation | Basis of preparationThe 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 short term investments, long term investments, Exchangeable Senior Notes (the "Exchangeable 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. |
Basis of consolidation | Basis of consolidationSubsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed, or has right 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 | 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 Group's reporting 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 | Revenue recognition Premium revenue The Group generates subscription revenue through the sale of the Premium Service in which customers can listen on-demand and offline. The Premium Service is 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, the Premium Service is 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, which is the delivery of the Premium Service. Additionally, the Group bundles the Premium Service with other 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 generated primarily from the sale of display, audio, and video advertising delivered through advertising impressions across music and podcast content. The Group enters into arrangements with advertising agencies that purchase advertising on our platform on behalf of their clients. The Group also enters into arrangements directly with some large advertisers. These advertising arrangements are typically sold on a cost-per-thousand basis and are evidenced by an Insertion Order, a submission of order placements through a self-serve platform that includes the online acceptance of terms and conditions, or contracts that specify 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 based on the number of impressions delivered. Additionally, the Group generates Ad-Supported revenue through arrangements with certain advertising automated exchanges, internal self-serve, and advertising marketplace platforms to distribute advertising inventory for purchase on a cost-per-thousand basis. Revenue is recognized when impressions are delivered on the platform. |
Advertising credits | Advertising credits Advertising credits that are not transferable are issued to certain rights holders and allow them to include advertisements 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 no additional 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 | Business combinations 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 has replaced awards held by the employees of the acquiree with its share-based compensation awards, whereby the vesting of the Group’s replacement awards is contingent on continued employment with the Group. Replacements of share-based compensation awards are accounted for as modifications of the acquiree’s existing share-based compensation 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 | Cost of revenue Cost of revenue consists predominantly of royalty and distribution costs related to content streaming. The Group incurs royalty costs paid to record labels, music publishers, and other rights holders for the right to stream music to the Group’s users. Royalties are typically calculated monthly 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 requires complex IT systems and a significant volume of data and is 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 or determination of statutory rates 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 reflects discounts provided by certain rights holders in return for promotional activities in connection with marketplace programs. Additionally, cost of revenue 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 the amortization of podcast content assets. Amortization of podcast content assets is recorded over the shorter of the estimated useful economic life, or the license period (if relevant), and begins at the release of each episode. In most cases, amortization is on an accelerated basis. We make payments to podcast publishers, whose content we monetize through advertising sales. The amounts owed are most often a share of revenues and recognized in cost of revenue when the related revenue is recognized. |
Research and development expenses | Research and development expensesResearch and development expenses primarily comprise 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 and desktop applications and streaming services. The costs incurred include related employee compensation and benefits costs, consulting costs, and facilities costs. |
Sales and marketing expenses | Sales and marketing expensesSales and marketing expenses primarily comprise employee compensation and benefits, sponsorships, 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 music record labels, publishers, songwriters, and artists to promote the availability of new releases on the Group’s platform, and the costs of providing free trials. Expenses included in the costs of providing free trials are derived primarily from per user royalty fees determined in accordance with the rights holder agreements. |
General and administrative expenses | General and administrative expensesGeneral and administrative expenses primarily comprise employee compensation and benefits for functions such as finance, accounting, analytics, legal, human resources, consulting fees, and other costs including facility and equipment costs, directors' and officers’ liability insurance, director fees, and fair value adjustments on contingent consideration. |
Income tax | Income tax The tax expense for the period comprises current and deferred tax. Tax is recognized in the consolidated statement of operations except to the extent 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 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 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, such as when there is a legally enforceable right to offset. (iii) Uncertain tax positions Management periodically evaluates positions taken in tax returns in which applicable tax legislation is subject to interpretation, and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty. |
Leases | Leases At the 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 are assessed under IAS 37 and are not within the scope of IFRS 16. 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 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. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, lease term, or if the Group changes its assessment of whether it will exercise an extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Group leases certain properties under non-cancellable lease agreements that relate to office space. The expected lease terms are between one 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 | Property and equipment 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 | Intangible assets Acquired intangible assets other than goodwill comprise acquired developed technology, trade names, customer relationships, publisher relationships, 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, 3 to 8 years for trade names and trademarks, 3 to 10 years for customer and publisher relationships, 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 | Goodwill 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. |
Impairment of non-financial assets | Impairment of non-financial assetsAssets 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 | Financial instruments (i) Financial assets Initial recognition and measurement The Group’s financial assets comprise 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 primarily comprise 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 . These are classified as current assets. Long term investments primarily comprise equity instruments carried at fair value through other comprehensive income based on the irrevocable election made at initial recognition under IFRS 9 Financial Instruments . The securities within this category are intended to be held for an indefinite period of time and for strategic investment purposes. These are not held for trading. These are classified as non-current assets. The Group’s primary long term investment is its equity investment in Tencent Music Entertainment Group (“TME”). Subsequent measurement After initial measurement, short term investments are primarily 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. 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. Gains or losses realized on the sale of these long term investments are not recycled through the profit and loss, but are instead reclassified to accumulated deficit within equity. Dividends received are recognized in the consolidated statement of operations in finance income. 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 the credit risk related to these assets is low 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 equity investments are not assessed for impairment due to the irrevocable election made under IFRS 9 Financial Instruments as stated above. 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 . Therefore, the Group does not determine if the credit risk for these instruments has increased significantly since initial recognition. Instead, a loss allowance is recognized based on lifetime expected credit losses at each reporting date. Impairment losses and subsequent reversals are recognized in profit or loss and is the amount required to adjust the loss allowance at the reporting date to the amount that is required to be recognized based on the aforementioned policy. The Group has established a provision matrix based on its historical credit loss experiences, adjusted for forward-looking factors specific to the debtors and the economic environment. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognized in the consolidated statement of operations. (ii) Financial liabilities Initial recognition and measurement The Group’s financial liabilities are comprised of trade and other payables, lease liabilities, Exchangeable Notes, derivative liabilities (warrants and instruments designated for hedging), and other liabilities, including contingent consideration. All financial liabilities except lease liabilities are recognized initially at fair value. The Group accounts for the Exchangeable Notes at fair value through profit and loss using the fair value option in accordance with IFRS 9, Financial Instruments. Under this approach, the Exchangeable Notes are accounted for in their entirety at fair value, with any change in fair value after initial measurement being recorded in finance income or cost in the consolidated statement of operations, except that changes in fair value that are due to changes in own credit risk are presented separately in other comprehensive income/(loss) and will not be reclassified to the consolidated statement of operations. The Group classified the Exchangeable Notes as a financial liability in accordance with IAS 32, Financial Instruments: Presentation. 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 determined that the warrants were precluded from equity classification, because while they contain no contractual obligation to deliver cash or other financial instruments to the holders other than the Company’s own shares, the exercise prices of the warrants are in US$ and not the Company’s functional currency and the Group allows for net settlement, which enables settlement for a variable number of the Company’s ordinary shares. Therefore, the warrants do not meet the requirements that they be settled by the issuer exchanging a fixed amount of cash or another financial asset for a fixed number of its own equity instruments. 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; and, • 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 are met. The Group recognizes these foreign exchange forward contracts as either assets or liabilities on the statement of financial position and they are measured at fair value at each reporting period. Assets and liabilities are offset and the net amount is presented in the statement of financial position when the Group has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis. The asset and liability positions of the foreign exchange forward contracts are included in other current assets and derivative liabilities on the consolidated statement of financial position, respectively. The Group reflects the gain or loss on the effective portion of a cash flow hedge as a component of equity and subsequently reclassifies cumulative gains and losses to revenues or cost of revenues, depending on the risk hedged, when the hedged transactions impact the statement of operations. If the hedged transactions become probable of not occurring, the corresponding amounts in other reserves are immediately reclassified to finance income or costs. Foreign exchange forward contracts that do not meet the requirements in IFRS 9 Financial Instruments |
Podcast content assets | Podcast content assetsThe Group incurs costs to acquire, license, produce or commission podcasts primarily for inclusion on the Service, with some titles distributed more broadly. We recognize podcast content assets as current assets in the consolidated statement of financial position and related cash flows are presented as operating cash flows. Fees, including license fees, and the direct costs of production including employee compensation and production overheads, external production services and participation minimum guarantees are capitalized. We often enter into multi-year commitments, however, the period between payments and receipt of content is typically less than a year and no borrowing costs are included in direct costs. All podcast content costs are recorded in the Ad-Supported segment.Amortization of podcast content assets is recorded in cost of revenue over the shorter of the estimated useful economic life or the license period (if relevant), and begins at the release of each episode. The economic life and expected amortization profile of podcast content assets is estimated by management based on historical listening patterns and is evaluated on an ongoing basis. |
Cash and cash equivalents and restricted cash | Cash and cash equivalents and restricted cashCash and cash equivalents comprise cash on deposit at banks and on hand and highly liquid investments including money market funds with maturities of three months or less at the date of purchase that are not subject to restrictions. Assets in money market funds, whose contractual cash flows do not represent solely payments of interest and principal, are measured at fair value with gains and losses arising from changes in fair value included in the consolidated statement of operations. |
Short term investments | Short term investments 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 primarily 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 12 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 | Long term investmentsLong term investments consist primarily of non-controlling equity interests in public and private companies where the Group does not exercise significant influence. The majority of the investments are classified as equity instruments carried at fair value through other comprehensive income. |
Share capital | Share capital 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. |
Share-based compensation | Share-based compensation Employees of the Group and members of the board of directors receive remuneration in the form of share-based compensation transactions, whereby employees and the board of directors render services in consideration for equity instruments. The cost of such equity-settled transactions 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 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 compensation. 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 compensation transaction or are otherwise beneficial to the grantee as measured at the date of modification. There were no material modifications to any share-based compensation transactions during 2022, 2021, and 2020. 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 compensation transactions are disclosed in Note 19. In many jurisdictions, tax authorities levy taxes on share-based compensation 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 fulfill 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 |
Employee benefits | Employee benefitsThe 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 | ProvisionsProvisions 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 There are no new IFRS or IFRS Interpretation Committee ("IFRIC") interpretations effective as of January 1, 2022 that have a material impact to the consolidated financial statements. |
New standards and interpretations issued not yet effective | New standards and interpretations issued not yet effective In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 Presentation of Financial Statements to specify the requirements for classifying liabilities as current or non-current. In November 2022, the IASB issued further amendments delaying the effective date to annual reporting periods beginning on or after January 1, 2024. The amendments are required to be applied on a retrospective basis. The amendments will require the Group to reclassify the Exchangeable Notes (as defined below) as a current liability if the exchange conditions are met, even if no noteholder actually requires us to exchange their notes. Adoption of this amendment will not result in the reclassification of the Exchangeable Notes as a current liability at any reporting date, from the inception of the notes to December 31, 2022 as the exchange conditions had not been met. In May 2021, the IASB issued an amendment to IAS 12 Income Taxes to clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations, effective for annual reporting periods beginning on or after January 1, 2023. The amendment is required to be applied on a modified retrospective basis. The amendment requires the Group to recognize a deferred tax asset (to the extent recoverable) and a deferred tax liability for all deductible and taxable temporary differences associated with our leases. The Group is currently evaluating the impact of this amendment, however, it is not expected to have a material impact on amounts recognized in the current, or prior periods. There are no other IFRS or IFRIC interpretations that are not yet effective and that are expected to have a material impact to the consolidated financial statements. |
Business combinations (Tables)
Business combinations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of detailed information about business combination [abstract] | |
Disclosure of Provisional Purchase Price Allocation to Assets Acquired and Liabilities Assumed in the Acquisition | The provisional purchase price allocation to assets acquired and liabilities assumed in the acquisition are as follows: (in € millions) Cash and cash equivalents 8 Trade and other receivables 11 Other current assets 15 Intangible assets 22 Trade and other payables (11) Accrued expenses and other liabilities (13) Total identifiable net assets 32 Goodwill 85 Fair value of net assets acquired 117 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of operating segments [abstract] | |
Summary of Key Financial Performance Measures of Segments Including Revenue, Cost of Revenue, and Gross Profit/(Loss) | Key financial performance measures of the segments including revenue, cost of revenue, and gross profit/(loss) are as follows: 2022 2021 2020 (in € millions) Premium Revenue 10,251 8,460 7,135 Cost of revenue 7,355 5,986 5,126 Gross profit 2,896 2,474 2,009 Ad-Supported Revenue 1,476 1,208 745 Cost of revenue 1,446 1,091 739 Gross profit 30 117 6 Consolidated Revenue 11,727 9,668 7,880 Cost of revenue 8,801 7,077 5,865 Gross profit 2,926 2,591 2,015 |
Summary of Reconciliation Between Reportable Segment Gross Profit to Group’s (Loss)/Income Before Tax | The reconciliation between reportable segment gross profit to the Group’s (loss)/income before tax is as follows: 2022 2021 2020 (in € millions) Segment gross profit 2,926 2,591 2,015 Research and development (1,387) (912) (837) Sales and marketing (1,572) (1,135) (1,029) General and administrative (626) (450) (442) Finance income 421 246 94 Finance costs (132) (91) (510) (Loss)/income before tax (370) 249 (709) |
Summary of Revenue and Non-current Asset by Geographic Country | Revenue by country 2022 2021 2020 (in € millions) United States 4,712 3,692 2,947 United Kingdom 1,113 994 836 Luxembourg 7 6 5 Other countries 5,895 4,976 4,092 Total 11,727 9,668 7,880 Non-current assets for this purpose consist of property and equipment and lease right-of-use assets. 2022 2021 2020 (in € millions) Sweden 142 148 151 United States 529 549 504 Other countries 94 112 102 Total 765 809 757 |
Personnel expenses (Tables)
Personnel expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Classes of employee benefits expense [abstract] | |
Summary of Personnel Expenses | 2022 2021 2020 (in € millions, except Wages and salaries 1,233 860 694 Social costs and payroll taxes 85 85 265 Contributions to retirement plans 51 40 32 Share-based compensation 381 223 176 Other employee benefits 150 124 97 Total 1,900 1,332 1,264 Average full-time employees 8,359 6,617 5,584 |
Auditor remuneration (Tables)
Auditor remuneration (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Auditor's remuneration [abstract] | |
Summary of Auditor Remuneration | 2022 2021 2020 (in € millions) Auditor fees 7 6 5 |
Finance income and costs (Table
Finance income and costs (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Finance Income And Costs [Abstract] | |
Summary of Finance Income and Costs | 2022 2021 2020 (in € millions) Finance income Fair value movements on derivative liabilities (Note 24) 71 53 49 Fair value movements on Exchangeable Notes (Note 24) 159 117 — Interest income 47 11 17 Other financial income 13 6 8 Foreign exchange gains 131 59 20 Total 421 246 94 Finance costs Fair value movements on derivative liabilities (Note 24) — (5) (307) Fair value movements on Exchangeable Notes (Note 24) (15) (5) — Interest expense on lease liabilities (41) (40) (41) Interest, bank fees and other costs (17) (11) (13) Transaction costs in relation to issuance of Exchangeable Notes — (18) — Foreign exchange losses (59) (12) (149) Total (132) (91) (510) |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Income Tax [Abstract] | |
Summary of Income Tax Expense (Benefit) | 2022 2021 2020 (in € millions) Current tax expense Current year 82 37 25 Changes in estimates in respect to prior year 13 2 (9) 95 39 16 Deferred tax (benefit)/expense Temporary differences (158) 5 (137) Change in recognition of deferred tax 124 241 (7) Change in tax rates — (1) — Changes in estimates in respect to prior years (1) (1) — (35) 244 (144) Income tax expense/(benefit) 60 283 (128) |
Summary of Reconciliation Between Reported Tax Expense and Theoretical Tax Expense Loss Before Taxes | A reconciliation between the income tax expense/(benefit) for the year, and the theoretical tax expense that would arise when applying the statutory tax rate in Luxembourg of 24.94% to the consolidated loss before tax for each of the years ended December 31, 2022, 2021, and 2020 is shown in the table below: 2022 2021 2020 (in € millions) (Loss)/income before tax (370) 249 (709) Tax using the Luxembourg tax rate (93) 62 (177) Effect of tax rates in foreign jurisdictions (11) 1 12 Permanent differences 23 (35) 54 Change in unrecognized deferred taxes 124 239 (9) Adjustments in respect of previous years 12 1 (9) Foreign withholding taxes 2 12 1 Other 3 3 — Income tax expense/(benefit) 60 283 (128) |
Schedule of Major Components of Deferred Tax Assets and Liabilities | The major components of deferred tax assets and liabilities are comprised of the following: 2022 2021 (in € millions) Intangible assets (70) (66) Share-based compensation 18 8 Tax losses carried forward 93 53 Property and equipment 50 58 Unrealized (gains)/losses (130) (43) Trade and other payables 29 1 Other 13 2 Net deferred tax assets 3 13 |
Summary of Reconciliation of Net Deferred Tax | A reconciliation of net deferred tax is shown in the table below: 2022 2021 2020 (in € millions) At January 1 13 15 7 Movement recognized in consolidated statement of 36 (240) 144 Movement recognized in consolidated statement of (32) 239 (136) Movement due to acquisition (14) (1) — At December 31 3 13 15 |
Summary of Deferred Tax Reconciliation to Balance Sheet | Reconciliation to consolidated statement of financial position 2022 2021 (in € millions) Deferred tax assets 8 13 Deferred tax liabilities 5 — |
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 entities within the Group can use the benefits. 2022 2021 (in € millions) Intangible assets 22 74 Share-based compensation 3 122 Tax losses carried forward 329 316 Tax credits carried forward 80 51 Capitalized Research & Development Costs 106 — Unrealized (gains)/ losses — 7 Other 58 60 Total 598 630 |
Schedule of Tax Loss and Credit Carry-forwards Expected to Expire | Tax loss and credit carry-forwards as at December 31, 2022 were expected to expire as follows: Expected expiry 2023 - 2032 2033 and onwards Unlimited Total (in € millions) Tax loss carry-forwards 101 437 1,596 2,134 Research and development credit carry-forward — 80 — 80 |
Loss per share (Tables)
Loss per share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings per share [abstract] | |
Summary of Computation of Loss Per Share | The computation of loss per share for the respective periods is as follows: 2022 2021 2020 (in € millions, except share and per share data) Basic loss per share Net loss attributable to owners of the parent (430) (34) (581) Shares used in computation: Weighted-average ordinary shares outstanding 192,934,862 191,298,397 187,583,307 Basic loss per share attributable to owners of the parent (2.23) (0.18) (3.10) Diluted loss per share Net loss attributable to owners of the parent (430) (34) (581) Fair value gains on dilutive Exchangeable Notes (144) (112) — Fair value gains on dilutive warrants — (53) — Net loss used in the computation (574) (199) (581) Shares used in computation: Weighted-average ordinary shares outstanding 192,934,862 191,298,397 187,583,307 Exchangeable Notes 2,911,500 2,424,921 — Warrants — 220,137 — Diluted weighted average ordinary shares 195,846,362 193,943,455 187,583,307 Diluted loss per share (2.93) (1.03) (3.10) |
Summary of Anti-Dilutive Securities | Potential dilutive securities that were not included in the diluted loss per share calculations because they would be anti-dilutive were as follows: 2022 2021 2020 Employee options 16,004,890 8,695,348 9,041,288 Restricted stock units 3,135,407 1,425,196 1,320,193 Other contingently issuable shares 71,717 108,720 156,190 Warrants 800,000 800,000 800,000 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Leases [Abstract] | |
Summary of Roll-forward of Lease Right-of-use Assets | Below is the roll-forward of lease right-of-use assets: Right of use assets (in € millions) Cost At January 1, 2021 581 Increases 23 Decreases (2) Exchange differences 30 At December 31, 2021 632 Increases 20 Exchange differences 23 At December 31, 2022 675 Accumulated depreciation At January 1, 2021 (137) Depreciation charge (53) Decreases 2 Exchange differences (7) At December 31, 2021 (195) Depreciation charge (59) Exchange differences (4) At December 31, 2022 (258) Cost, net accumulated depreciation At December 31, 2021 437 At December 31, 2022 417 |
Summary of Roll-forward of Lease Liabilities | Below is the roll-forward of lease liabilities: Lease liabilities 2022 2021 (in € millions) At January 1 623 608 Increases 20 23 Payments (1) (96) (85) Interest expense 41 40 Lease incentives received (1) 2 7 Increases in lease incentives receivable — (2) Exchange differences 23 32 At December 31 613 623 (1) Included within the consolidated statement of cash flows |
Summary of Maturity Analysis of Lease Liabilities | Below is the maturity analysis of lease liabilities: Lease liabilities December 31, 2022 Maturity Analysis (in € millions) Less than one year 98 One to five years 367 More than five years 376 Total lease commitments 841 Impact of discounting remaining lease payments (226) Lease incentives receivable (2) Total lease liabilities 613 Lease liabilities included in the consolidated Current 58 Non-current 555 Total 613 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of detailed information about property, plant and equipment [abstract] | |
Summary of Property and Equipment | Property Leasehold Total (in € millions) Cost At January 1, 2021 56 346 402 Additions 26 55 81 Disposals (1) (1) (2) Exchange differences 2 22 24 At December 31, 2021 83 422 505 Additions 8 11 19 Disposals (1) — (1) Exchange differences 2 15 17 At December 31, 2022 92 448 540 Accumulated depreciation At January 1, 2021 (36) (53) (89) Depreciation charge (9) (32) (41) Disposals — 1 1 Exchange differences (1) (3) (4) At December 31, 2021 (46) (87) (133) Depreciation charge (15) (44) (59) Disposals 1 — 1 Exchange differences — (1) (1) At December 31, 2022 (60) (132) (192) Cost, net accumulated depreciation At December 31, 2021 37 335 372 At December 31, 2022 32 316 348 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible assets and goodwill [abstract] | |
Summary of Goodwill and Intangible Assets | Internal Acquired Total Goodwill Total (in € millions) Cost At January 1, 2021 64 91 155 736 891 Additions 13 — 13 — 13 Acquisition, business combination (Note 5) — 7 7 106 113 Write-off of fully amortized intangible assets (13) — (13) — (13) Exchange differences — 7 7 52 59 At December 31, 2021 64 105 169 894 1,063 Additions 5 — 5 — 5 Acquisition, business combination (Note 5) — 82 82 221 303 Exchange differences — 6 6 53 59 At December 31, 2022 69 193 262 1,168 1,430 Accumulated amortization At January 1, 2021 (31) (27) (58) — (58) Amortization charge (15) (18) (33) — (33) Write-off of fully amortized intangible assets 13 — 13 — 13 Exchange differences — (2) (2) — (2) At December 31, 2021 (33) (47) (80) — (80) Amortization charge (17) (36) (53) — (53) Exchange differences — (2) (2) — (2) At December 31, 2022 (50) (85) (135) — (135) Cost, net accumulated amortization At December 31, 2021 31 58 89 894 983 At December 31, 2022 19 108 127 1,168 1,295 |
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 2022 2022 2021 2021 (in € millions) Goodwill 274 894 129 765 |
Restricted cash and other non_2
Restricted cash and other non-current assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Restricted Cash And Other Non Current Assets [Abstract] | |
Summary of Restricted Cash and Other Non-current Assets | 2022 2021 (in € millions) Restricted cash Lease deposits and guarantees 53 51 Other 2 1 Other non-current assets 23 25 Total 78 77 |
Trade and other receivables (Ta
Trade and other receivables (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Trade and other receivables [abstract] | |
Summary of Net Trade and Other Receivables | 2022 2021 (in € millions) Trade receivables 509 443 Less: allowance for expected credit losses (7) (6) Trade receivables – net 502 437 Other 188 184 Total 690 621 |
Summary of Aging of Group' s Net Trade Receivables | The aging of the Group’s net trade receivables is as follows: 2022 2021 (in € millions) Current 317 268 Overdue 1 – 30 days 91 86 Overdue 31 – 60 days 49 43 Overdue 60 – 90 days 19 17 Overdue more than 90 days 26 23 502 437 |
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: 2022 2021 (in € millions) At January 1 6 4 Provision for expected credit losses 8 7 Reversal of unutilized provisions (2) (2) Receivables written off (5) (3) At December 31 7 6 |
Other current assets (Tables)
Other current assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other current assets [Abstract] | |
Summary of Other Current Assets | 2022 2021 (in € millions) Content assets 187 161 Prepaid expenses and other 89 74 Derivative assets 31 11 Total 307 246 |
Issued share capital and othe_2
Issued share capital and other reserves (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of classes of share capital [abstract] | |
Summary of Other Reserves | Other reserves 2022 2021 2020 (in € millions) Currency translation At January 1 17 (54) (11) Currency translation 83 71 (43) At December 31 100 17 (54) Short term investments At January 1 (3) 5 1 (Losses)/gains on fair value that may be subsequently reclassified (23) (8) 8 Gains reclassified to consolidated statement of operations 4 (2) (3) Deferred tax 4 2 (1) At December 31 (18) (3) 5 Long term investments At January 1 (26) 1,059 444 (Losses)/gains on fair value not to be subsequently reclassified 212 (1,218) 777 Losses/(gains) on sale of long term investment reclassified to accumulated deficit 2 (134) — Tax effect of gains on sale of long term investment reclassified to accumulated deficit (5) 30 — Deferred tax (22) 237 (162) At December 31 161 (26) 1,059 Exchangeable Notes At January 1 — — — Gains on fair value attributable to changes in credit risk 4 — — Deferred tax (1) — — At December 31 3 — — Cash flow hedges At January 1 (4) (3) (4) (Losses)/gains on fair value that may be subsequently reclassified 4 (11) 5 Losses/(gains) reclassified to revenue 32 51 (15) (Gains)/losses reclassified to cost of revenue (20) (40) 11 Deferred tax (2) (1) — At December 31 10 (4) (3) Share-based compensation At January 1 869 680 494 Share-based compensation (Note 19) 385 222 181 Income tax impact associated with share-based compensation (Note 10) 51 21 34 Restricted stock units withheld for employee taxes (40) (54) (29) At December 31 1,265 869 680 Other reserves at December 31 1,521 853 1,687 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Share Based Payments [Abstract] | |
Schedule of Activities in RSUs, RSAs and Other Contingently Issuable Shares Outstanding and Related Information | Activity in the Group's RSUs, RSAs, and other contingently issuable shares outstanding and related information is as follows: RSUs RSAs Other Number of Weighted Number of Weighted Number of Weighted US$ US$ US$ Outstanding at January 1, 2020 638,350 134.79 41,280 90.65 162,320 145.21 Granted 1,127,149 161.50 — — 34,450 145.14 Forfeited (91,613) 143.13 — — — — Released (353,693) 138.66 (41,280) 90.65 (40,580) 145.21 Outstanding at December 31, 2020 1,320,193 155.98 — — 156,190 145.19 Granted 793,337 277.21 — — 22,988 261.00 Forfeited (175,751) 190.26 — — — — Released (512,583) 178.19 — — (70,458) 182.98 Outstanding at December 31, 2021 1,425,196 211.25 — — 108,720 145.19 Granted 2,914,248 121.42 — — 30,824 162.21 Forfeited (359,238) 173.04 — — (20,357) 145.21 Released (844,799) 173.76 — — (47,470) 145.20 Outstanding at December 31, 2022 3,135,407 142.23 — — 71,717 152.50 |
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 Weighted US$ Outstanding at January 1, 2020 12,153,772 107.68 Granted 2,356,040 180.12 Forfeited (855,051) 131.30 Exercised (4,556,908) 78.87 Expired (56,565) 146.69 Outstanding at December 31, 2020 9,041,288 138.60 Granted 2,164,070 315.86 Forfeited (414,317) 191.43 Exercised (2,074,572) 96.12 Expired (21,121) 196.25 Outstanding at December 31, 2021 8,695,348 190.19 Granted 9,640,611 141.55 Forfeited (1,332,946) 215.07 Exercised (620,143) 78.33 Expired (377,980) 130.86 Outstanding at December 31, 2022 16,004,890 164.56 Exercisable at December 31, 2020 4,022,571 113.91 Exercisable at December 31, 2021 4,453,983 152.64 Exercisable at December 31, 2022 6,402,109 172.69 |
Summary of Stock Options Outstanding | The stock options outstanding at December 31, 2022, 2021, and 2020 are comprised of the following: 2022 2021 2020 Range of exercise prices (US$) Number of Weighted Number of Weighted Number of Weighted 7.59 to 45.00 2,289 1.1 3,533 1.8 195,207 0.3 45.01 to 90.00 1,147,396 4.8 415,340 0.2 1,243,833 1.2 90.01 to 135.00 4,036,371 3.3 1,659,359 1.8 2,234,257 2.7 135.01 to 180.00 6,741,590 3.1 3,076,253 2.5 3,671,417 3.5 180.01 to 498.98 4,077,244 3.0 3,540,863 3.7 1,696,574 3.6 16,004,890 3.3 8,695,348 2.7 9,041,288 2.9 |
Summary of Black-Scholes Option-Pricing Models | The following table lists the inputs to the Black-Scholes option-pricing models used for stock options for the years ended December 31, 2022, 2021, and 2020: 2022 2021 2020 Expected volatility (%) 35.9 – 60.0 34.1 – 43.1 30.0 – 42.8 Risk-free interest rate (%) 0.9 – 4.5 0.2 – 1.1 0.1 – 1.7 Expected life of stock options (years) 2.6 – 4.8 2.6 – 4.8 2.6 – 4.8 Weighted-average share price (US$) 124.47 283.15 162.82 |
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 2022: 2022 (in € millions) Actual stock option expense 142 Stock option expense increase/(decrease) under the following Volatility decreased by 10% (25) Volatility increase by 10% 34 Expected life decrease by 1 year (19) Expected life increase by 1 year 24 |
Summary of Expense Recognized in Consolidated Statement of Operations for Employee Share Based Payments | The expense recognized in the consolidated statement of operations for share-based compensation is as follows: 2022 2021 2020 (in € millions) Cost of revenue 8 9 8 Research and development 218 119 84 Sales and marketing 73 41 34 General and administrative 82 54 50 Total 381 223 176 |
Trade and other payables (Table
Trade and other payables (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Trade and other payables [abstract] | |
Summary of Trade and Other Payables | 2022 2021 (in € millions) Trade payables 588 534 Value added tax and sales taxes payable 244 229 Other current liabilities 13 30 Total 845 793 |
Accrued expenses and other li_2
Accrued expenses and other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Of Accrued Expenses And Other Liabilities [Abstract] | |
Summary of Accrued Expenses and Other Liabilities | 2022 2021 (in € millions) Non-current Other accrued liabilities 28 37 Total 28 37 Current Accrued fees to rights holders 1,665 1,378 Accrued salaries, vacation, and related taxes 120 92 Accrued social costs for options and RSUs 7 84 Accrued operating liabilities 194 188 Other accrued expenses 107 99 Total 2,093 1,841 |
Provisions (Tables)
Provisions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Provisions [abstract] | |
Summary of Changes in Groups Provisions | Legal Indirect tax Onerous Other Total (in € millions) Carrying amount at January 1, 2021 4 11 1 6 22 Charged/(credited) to the consolidated statement of operations: Additional provisions — 4 12 1 17 Reversal of unutilized amounts — (6) (2) — (8) Utilized — (1) (1) — (2) Carrying amount at December 31, 2021 4 8 10 7 29 Charged/(credited) to the consolidated statement of operations: Additional provisions 6 4 19 — 29 Reversal of unutilized amounts — (4) (2) (1) (7) Exchange differences 1 1 1 — 3 Utilized (1) (1) (23) — (25) Carrying amount at December 31, 2022 10 8 5 6 29 As at December 31, 2021 Current portion 4 8 6 4 22 Non-current portion — — 4 3 7 As at December 31, 2022 Current portion 10 8 5 3 26 Non-current portion — — — 3 3 |
Financial risk management and_2
Financial risk management and financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of detailed information about financial instruments [abstract] | |
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. 2022 2021 (in € millions) Liquidity Short term investments 867 756 Cash equivalents 1,836 1,970 Cash at bank and on hand 647 774 Liquidity position 3,350 3,500 |
Disclosure Of Effect Of 10% Change In Currency | 2022 Swedish krona British pound U.S. dollar (in € millions) (Increase)/decrease in loss before tax (13) (18) 68 2021 Swedish krona British pound U.S. dollar (in € millions) (Increase)/decrease in income before tax (14) (8) 94 |
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, 2022: Notional amount in foreign currency Australian dollar British pound Canadian dollar Norwegian krone Swedish krona U.S. dollar (in millions) Hedged line item in consolidated statement of operations Revenue 336 453 293 905 1,504 69 Cost of revenue 246 321 209 599 992 52 Total 582 774 502 1,504 2,496 121 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, 2021: Notional amount in foreign currency Australian dollar British pound Canadian dollar Norwegian krone Swedish krona U.S. dollar (in millions) Hedged line item in consolidated statement of operations Revenue 327 429 274 870 1,446 54 Cost of revenue 240 304 190 573 959 43 Total 567 733 464 1,443 2,405 97 |
Summary of Major Security Type, Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | 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, 2022 (in € millions) Financial assets at fair value Cash equivalents: Money market funds 1,543 — — 1,543 Time deposits 293 — — 293 Short term investments: Money market funds 125 — — 125 Government securities 245 5 — 250 Corporate notes — 309 — 309 Fixed income funds 183 — — 183 Derivatives (designated for hedging): Foreign exchange forwards — 31 — 31 Long term investments 1,095 — 43 1,138 Total financial assets at fair value by level 3,484 345 43 3,872 Financial liabilities at fair value Exchangeable Notes — — 1,128 1,128 Derivatives (not designated for hedging): Warrants — — 1 1 Derivatives (designated for hedging): Foreign exchange forwards — 20 — 20 Total financial liabilities at fair value by level — 20 1,129 1,149 Financial assets and liabilities by fair value hierarchy level Level 1 Level 2 Level 3 December 31, 2021 (in € millions) Financial assets at fair value Cash equivalents Money market funds 1,970 — — 1,970 Short term investments: Money market funds 25 — — 25 Government securities 204 18 — 222 Corporate notes — 308 — 308 Collateralized reverse purchase agreements — 67 — 67 Fixed income funds 134 — — 134 Derivatives (designated for hedging): Foreign exchange forwards — 11 — 11 Long term investments 852 — 64 916 Total financial assets at fair value by level 3,185 404 64 3,653 Financial liabilities at fair value Exchangeable Notes — — 1,202 1,202 Derivatives (not designated for hedging): Warrants — — 72 72 Derivatives (designated for hedging): Foreign exchange forwards — 17 — 17 Contingent consideration — — 17 17 Total financial liabilities at fair value by level — 17 1,291 1,308 |
Summary of Changes in Investment | The table below presents the changes in the investment in TME: 2022 2021 2020 (in € millions) At January 1 852 2,228 1,481 Changes in fair value recorded in other comprehensive income/(loss) 242 (1,376) 747 At December 31 1,094 852 2,228 The table below presents the changes in the other long term investments: 2022 2021 2020 (in € millions) At January 1 64 49 16 Initial recognition of long term investment 3 2 9 Changes in fair value recorded in other comprehensive (loss)/income (25) 158 29 Changes in fair value recognized in consolidated statement of operations (1) (4) (4) Sale of long term investment — (144) — Effect of changes in foreign exchange rates 2 3 (1) At December 31 43 64 49 |
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: 2022 2021 2020 Expected term (years) 1.65 0.5 – 2.65 1.5 Risk free rate (%) 4.52 0.19 – 0.89 0.11 Volatility (%) 55.0 40.0 - 45.0 50.0 Share price (US$) 78.95 234.03 314.66 |
Summary of Changes in Warrants Liability | The table below presents the changes in the warrants liability: 2022 2021 2020 (in € millions) January 1 72 89 98 Issuance of warrant for cash — 31 — Issuance of shares upon exercise of, or net settlement of, warrants — — (267) Non cash changes recognized in profit or loss Changes in fair value recognized in consolidated statement of operations (74) (53) 263 Effect of changes in foreign exchange rates 3 5 (5) At December 31 1 72 89 |
Summary of Changes in Contingent Consideration Liability | The table below presents the changes in the contingent consideration liability: 2022 2021 2020 (in € millions) At January 1 17 30 27 Contingent consideration payments (17) (17) (7) Changes in fair value recognized in consolidated statement of operations — 2 13 Effect of changes in foreign exchange rates — 2 (3) At December 31 — 17 30 |
Disclosure of Detailed Information About Borrowings | The table below presents the changes in the Exchangeable Notes: 2022 2021 (in € millions) At January 1 1,202 — Initial recognition — 1,232 Changes in fair value recognized in consolidated statement of operations (144) (112) Changes in fair value recorded in other comprehensive loss (4) — Effect of changes in foreign exchange rates 74 82 At December 31 1,128 1,202 |
Description of Fair Value Assumptions of Borrowings | The key assumptions used in the binomial option pricing model for the Exchangeable Notes were as follows: 2022 2021 Risk free rate (%) 4.20 1.15 Discount rate (%) 7.0 3.9 Volatility (%) 45.0 40.0 Share price (US$) 78.95 234.03 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments And Contingencies [Abstract] | |
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: 2022 2021 2020 (in € millions) Not later than one year 1,111 788 317 Later than one year but not more than 5 years 298 2,491 3,259 Total 1,409 3,279 3,576 |
Schedule of Minimum Purchase Obligations and Service Agreements With Minimum Spend Commitments Under Noncancellable Agreements | In addition, the Group is subject to various non-cancelable purchase obligations and service agreements with minimum spend commitments, including a service agreement with Google for the use of Google Cloud Platform and certain podcast and marketing commitments as at December 31: 2022 2021 2020 (in € millions) Not later than one year 485 362 279 Later than one year but not more than 5 years 334 435 619 More than 5 years 98 — — Total 917 797 898 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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. 2022 2021 2020 (in € millions) Key management compensation Short term employee benefits 6 4 5 Share-based compensation 37 26 30 Total 43 30 35 |
Group information (Tables)
Group information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of subsidiaries [abstract] | |
Summary of Company's Principal Subsidiaries | The Company’s principal subsidiaries as at December 31, 2022 are as follows: Name Principal activities Proportion of Country of 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 Spain S.L. Sales, marketing and other support services 100 % Spain Spotify GmbH Sales, marketing and other support services 100 % Germany Spotify France SAS Sales, marketing and other support services 100 % France Spotify Canada Inc. Sales, marketing and other support services 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, distribution and marketing 100 % India S Servicios de Música México, S.A. de C.V. Sales and marketing 100 % Mexico Spotify Singapore Pte Ltd. Sales and marketing 100 % Singapore Spotify Italy S.r.l. Sales and marketing 100 % Italy |
Summary of significant accoun_3
Summary of significant accounting policies - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
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 |
Bottom of Range | Technology | |
Disclosure of summary of significant accounting policies [line items] | |
Estimated useful lives | 3 years |
Bottom of Range | Trade Names and Trademarks | |
Disclosure of summary of significant accounting policies [line items] | |
Estimated useful lives | 3 years |
Bottom of Range | Customer and Publisher Relationships | |
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] | |
Duration podcast content assets expected to be consumed (less than) | 3 years |
Average duration of investment portfolio (less than) | 2 years |
Top of Range | Technology | |
Disclosure of summary of significant accounting policies [line items] | |
Estimated useful lives | 5 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 | Customer and Publisher Relationships | |
Disclosure of summary of significant accounting policies [line items] | |
Estimated useful lives | 10 years |
Property and equipment | Bottom of Range | |
Disclosure of summary of significant accounting policies [line items] | |
Expected lease term | 1 year |
Estimated useful lives, property, plant and equipment | 3 years |
Property and equipment | Top of Range | |
Disclosure of summary of significant accounting policies [line items] | |
Expected lease term | 12 years |
Estimated useful lives, property, plant and equipment | 5 years |
Leasehold improvements | |
Disclosure of summary of significant accounting policies [line items] | |
Estimated useful lives description | shorter of the lease term or useful life |
Revenue recognition (Details)
Revenue recognition (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract liabilities [abstract] | |||
Deferred revenue | € 520 | € 458 | |
Revenue recognition | € 448 | € 372 | € 301 |
Business combinations - Additio
Business combinations - Additional Information (Details) € in Millions | 12 Months Ended | 25 Months Ended | ||
Jul. 11, 2022 EUR (€) | Jun. 15, 2022 EUR (€) | Dec. 31, 2022 EUR (€) | Feb. 28, 2022 EUR (€) acquisition | |
Disclosure of detailed information about business combination [line items] | ||||
Number of acquisition | acquisition | 2 | |||
Investing cash outflows for payments of deferred consideration | € 11 | |||
Top of Range | Trade Names | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 8 years | |||
Bottom of Range | Trade Names | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 3 years | |||
Sonantic Limited | ||||
Disclosure of detailed information about business combination [line items] | ||||
Percentage of voting equity interests acquired | 100% | |||
Fair value of net assets acquired | € 93 | |||
Goodwill | 64 | |||
Intangible assets | 31 | |||
Cash and cash equivalents | 2 | |||
Deferred tax liabilities | 4 | |||
Acquisition related costs | 2 | |||
Goodwill expected to be deductible for tax purposes | 0 | |||
Estimated fair value of contingent consideration | 30 | |||
Contingent consideration recognised as of acquisition date, equity consideration | 4 | |||
Sonantic Limited | Ad-Supported | ||||
Disclosure of detailed information about business combination [line items] | ||||
Goodwill | 16 | |||
Sonantic Limited | Premium Segment | ||||
Disclosure of detailed information about business combination [line items] | ||||
Goodwill | € 48 | |||
Sonantic Limited | Existing Technology | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 5 years | |||
Sonantic Limited | Top of Range | ||||
Disclosure of detailed information about business combination [line items] | ||||
Business combination potential contingent consideration period | 4 years | |||
Findaway World, LLC | ||||
Disclosure of detailed information about business combination [line items] | ||||
Percentage of voting equity interests acquired | 100% | |||
Fair value of net assets acquired | € 117 | |||
Goodwill | 85 | |||
Intangible assets | 22 | |||
Cash and cash equivalents | 8 | |||
Acquisition related costs | 5 | |||
Estimated fair value of contingent consideration | 13 | |||
Contingent consideration recognised as of acquisition date, equity consideration | € 5 | |||
Findaway World, LLC | Existing Technology | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 5 years | |||
Findaway World, LLC | Trade Names | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 5 years | |||
Findaway World, LLC | Publisher Relationships | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 7 years | |||
Findaway World, LLC | Top of Range | ||||
Disclosure of detailed information about business combination [line items] | ||||
Business combination potential contingent consideration period | 4 years | |||
Podsights and Chartable | ||||
Disclosure of detailed information about business combination [line items] | ||||
Fair value of net assets acquired | € 83 | |||
Goodwill | 59 | |||
Intangible assets | 26 | |||
Cash and cash equivalents | 4 | |||
Deferred tax liabilities | 7 | |||
Acquisition related costs | 2 | |||
Goodwill expected to be deductible for tax purposes | 0 | |||
Estimated fair value of contingent consideration | 21 | |||
Contingent consideration recognised as of acquisition date, equity consideration | 10 | |||
Other tangible net assets | € 1 | |||
Podsights and Chartable | Customer Relationship | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 1 year | |||
Podsights and Chartable | Top of Range | ||||
Disclosure of detailed information about business combination [line items] | ||||
Business combination potential contingent consideration period | 4 years | |||
Podsights and Chartable | Top of Range | Existing Technology | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 5 years | |||
Podsights and Chartable | Bottom of Range | Existing Technology | ||||
Disclosure of detailed information about business combination [line items] | ||||
Estimated useful lives | 3 years | |||
Podsights | ||||
Disclosure of detailed information about business combination [line items] | ||||
Percentage of voting equity interests acquired | 100% | |||
Chartable Holding, Inc. | ||||
Disclosure of detailed information about business combination [line items] | ||||
Percentage of voting equity interests acquired | 100% |
Business combinations - Provisi
Business combinations - Provisional Purchase Price Allocation to Assets Acquired and Liabilities Assumed (Details) - Findaway World, LLC € in Millions | Jun. 15, 2022 EUR (€) |
Disclosure of detailed information about business combination [line items] | |
Cash and cash equivalents | € 8 |
Trade and other receivables | 11 |
Other current assets | 15 |
Intangible assets | 22 |
Trade and other payables | (11) |
Accrued expenses and other liabilities | (13) |
Total identifiable net assets | 32 |
Goodwill | 85 |
Fair value of net assets acquired | € 117 |
Segment information - Additiona
Segment information - Additional Information (Details) | Dec. 31, 2022 EUR (€) segment | Dec. 31, 2021 EUR (€) | Dec. 31, 2020 EUR (€) |
Disclosure of operating segments [line items] | |||
Number of reportable segment | segment | 2 | ||
Property and equipment | € 348,000,000 | € 372,000,000 | |
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/(Loss) (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of operating segments [line items] | |||
Revenue | € 11,727 | € 9,668 | € 7,880 |
Cost of revenue | 8,801 | 7,077 | 5,865 |
Gross profit | 2,926 | 2,591 | 2,015 |
Premium | |||
Disclosure of operating segments [line items] | |||
Revenue | 10,251 | 8,460 | 7,135 |
Cost of revenue | 7,355 | 5,986 | 5,126 |
Gross profit | 2,896 | 2,474 | 2,009 |
Ad-Supported | |||
Disclosure of operating segments [line items] | |||
Revenue | 1,476 | 1,208 | 745 |
Cost of revenue | 1,446 | 1,091 | 739 |
Gross profit | € 30 | € 117 | € 6 |
Segment information - Summary_2
Segment information - Summary of Reconciliation Between Reportable Segment Gross Profit to Group’s (Loss)/Income Before Tax (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of operating segments [abstract] | |||
Segment gross profit | € 2,926 | € 2,591 | € 2,015 |
Research and development | (1,387) | (912) | (837) |
Sales and marketing | (1,572) | (1,135) | (1,029) |
General and administrative | (626) | (450) | (442) |
Finance income | 421 | 246 | 94 |
Finance costs | (132) | (91) | (510) |
(Loss)/income before tax | € (370) | € 249 | € (709) |
Segment information - Summary_3
Segment information - Summary of Revenue by Geographic Area (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of operating segments [line items] | |||
Revenue | € 11,727 | € 9,668 | € 7,880 |
United States | |||
Disclosure of operating segments [line items] | |||
Revenue | 4,712 | 3,692 | 2,947 |
United Kingdom | |||
Disclosure of operating segments [line items] | |||
Revenue | 1,113 | 994 | 836 |
Luxembourg | |||
Disclosure of operating segments [line items] | |||
Revenue | 7 | 6 | 5 |
Other countries | |||
Disclosure of operating segments [line items] | |||
Revenue | € 5,895 | € 4,976 | € 4,092 |
Segment information - Summary_4
Segment information - Summary of Non-Current Asset by Geographic Area (Details) - EUR (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of operating segments [line items] | |||
Non-current assets | € 3,284 | € 2,798 | |
Property and Equipment and Lease Right-of-Use Assets | |||
Disclosure of operating segments [line items] | |||
Non-current assets | 765 | 809 | € 757 |
Property and Equipment and Lease Right-of-Use Assets | Sweden | |||
Disclosure of operating segments [line items] | |||
Non-current assets | 142 | 148 | 151 |
Property and Equipment and Lease Right-of-Use Assets | United States | |||
Disclosure of operating segments [line items] | |||
Non-current assets | 529 | 549 | 504 |
Property and Equipment and Lease Right-of-Use Assets | Other countries | |||
Disclosure of operating segments [line items] | |||
Non-current assets | € 94 | € 112 | € 102 |
Personnel expenses - Summary of
Personnel expenses - Summary of Personnel Expense (Details) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 EUR (€) employee | Dec. 31, 2021 EUR (€) employee | Dec. 31, 2020 EUR (€) employee | |
Classes of employee benefits expense [abstract] | |||
Wages and salaries | € 1,233 | € 860 | € 694 |
Social costs and payroll taxes | 85 | 85 | 265 |
Contributions to retirement plans | 51 | 40 | 32 |
Share-based compensation | 381 | 223 | 176 |
Other employee benefits | 150 | 124 | 97 |
Total | € 1,900 | € 1,332 | € 1,264 |
Average full-time employees | employee | 8,359 | 6,617 | 5,584 |
Auditor remuneration - Summary
Auditor remuneration - Summary of Auditor Remuneration (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Auditor's remuneration [abstract] | |||
Auditor fees | € 7 | € 6 | € 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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finance income | |||
Fair value movements on derivative liabilities (Note 24) | € 71 | € 53 | € 49 |
Fair value movements on Exchangeable Notes (Note 24) | 159 | 117 | 0 |
Interest income | 47 | 11 | 17 |
Other financial income | 13 | 6 | 8 |
Foreign exchange gains | 131 | 59 | 20 |
Total | 421 | 246 | 94 |
Finance costs | |||
Fair value movements on derivative liabilities (Note 24) | 0 | (5) | (307) |
Fair value movements on Exchangeable Notes (Note 24) | (15) | (5) | 0 |
Interest expense on lease liabilities | (41) | (40) | (41) |
Interest, bank fees and other costs | (17) | (11) | (13) |
Transaction costs in relation to issuance of Exchangeable Notes | 0 | (18) | 0 |
Foreign exchange losses | (59) | (12) | (149) |
Total | € (132) | € (91) | € (510) |
Income tax - Summary of Income
Income tax - Summary of Income Tax Expense (Benefit) (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current tax expense | |||
Current year | € 82 | € 37 | € 25 |
Changes in estimates in respect to prior year | 13 | 2 | (9) |
Total current tax expense | 95 | 39 | 16 |
Deferred tax (benefit)/expense | |||
Temporary differences | (158) | 5 | (137) |
Change in recognition of deferred tax | 124 | 241 | (7) |
Change in tax rates | 0 | (1) | 0 |
Changes in estimates in respect to prior years | (1) | (1) | 0 |
Total deferred tax expense/(benefit) | (35) | 244 | (144) |
Income tax expense/(benefit) | € 60 | € 283 | € (128) |
Income tax - Additional Informa
Income tax - Additional Information (Details) - EUR (€) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Income Tax [Line Items] | |||
Income tax (benefit)/expense relating to components of other comprehensive (loss)/income | € 26,000,000 | € (268,000,000) | € 163,000,000 |
Tax effect of gains on sale of long term investment reclassified to accumulated deficit | (5,000,000) | € 30,000,000 | |
Deferred tax liability recognized on investment in subsidiaries | € 0 | ||
Luxembourg | |||
Disclosure Of Income Tax [Line Items] | |||
Statutory tax rate | 24.94% | ||
Net operating loss carry-forwards | € 195,000,000 | ||
United States | Federal | |||
Disclosure Of Income Tax [Line Items] | |||
Net operating loss carry-forwards | 214,000,000 | ||
Operating loss carryforward subject to annual limitations | 24,000,000 | ||
United States | State And Local | |||
Disclosure Of Income Tax [Line Items] | |||
Net operating loss carry-forwards | 248,000,000 | ||
Sweden | |||
Disclosure Of Income Tax [Line Items] | |||
Net operating loss carry-forwards | 1,359,000,000 | ||
Other foreign countries | |||
Disclosure Of Income Tax [Line Items] | |||
Net operating loss carry-forwards | 118,000,000 | ||
Provisions | |||
Disclosure Of Income Tax [Line Items] | |||
Uncertain tax position liability, expected to be resolved | 5,000,000 | ||
Uncertain tax position liability | 9,000,000 | ||
Uncertain tax positions expected to be resolved in the next twelve months | € 2,000,000 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Income Tax [Abstract] | |||
(Loss)/income before tax | € (370) | € 249 | € (709) |
Tax using the Luxembourg tax rate | (93) | 62 | (177) |
Effect of tax rates in foreign jurisdictions | (11) | 1 | 12 |
Permanent differences | 23 | (35) | 54 |
Change in unrecognized deferred taxes | 124 | 239 | (9) |
Adjustments in respect of previous years | 12 | 1 | (9) |
Foreign withholding taxes | 2 | 12 | 1 |
Other | 3 | 3 | 0 |
Income tax expense/(benefit) | € 60 | € 283 | € (128) |
Income tax - Schedule of Major
Income tax - Schedule of Major Components of Deferred Tax Assets and Liabilities (Details) - EUR (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Net deferred tax assets | € 3 | € 13 | € 15 | € 7 |
Intangible assets | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Net deferred tax assets | (70) | (66) | ||
Share-based compensation | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Net deferred tax assets | 18 | 8 | ||
Tax losses carried forward | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Net deferred tax assets | 93 | 53 | ||
Property and equipment | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Net deferred tax assets | 50 | 58 | ||
Unrealized (gains)/losses | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Net deferred tax assets | (130) | (43) | ||
Trade and other payables | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Net deferred tax assets | (29) | (1) | ||
Other | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Net deferred tax assets | € 13 | € 2 |
Income tax - Summary of Recon_2
Income tax - Summary of Reconciliation of Net Deferred Tax (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Income Tax [Abstract] | |||
Beginning balance | € 13 | € 15 | € 7 |
Movement recognized in consolidated statement of operations | 36 | (240) | 144 |
Movement recognized in consolidated statement of changes in equity and other comprehensive income | (32) | 239 | (136) |
Movement due to acquisition | (14) | (1) | 0 |
Ending balance | € 3 | € 13 | € 15 |
Income tax - Summary of Deferre
Income tax - Summary of Deferred Tax Reconciliation to Balance Sheet (Details) - EUR (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Disclosure Of Income Tax [Abstract] | ||
Deferred tax assets | € 8 | € 13 |
Deferred tax liabilities | € 5 | € 0 |
Income tax - Summary of Defer_2
Income tax - Summary of Deferred Tax Assets Unrecognized (Details) - EUR (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | € 598 | € 630 |
Intangible assets | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 22 | 74 |
Share-based compensation | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 3 | 122 |
Tax losses carried forward | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 329 | 316 |
Tax credits carried forward | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 80 | 51 |
Capitalized Research & Development Costs | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 106 | 0 |
Unrealized (gains)/ losses | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 0 | 7 |
Other | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | € 58 | € 60 |
Income tax - Schedule of Tax Lo
Income tax - Schedule of Tax Loss and Credit Carry-forwards Expected To Expire (Details) € in Millions | Dec. 31, 2022 EUR (€) |
Tax losses carried forward | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |
Tax loss carry-forwards expected to expire | € 2,134 |
Research and development credit carry-forward | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |
Tax loss carry-forwards expected to expire | 80 |
2023 - 2032 | Tax losses carried forward | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |
Tax loss carry-forwards expected to expire | 101 |
2023 - 2032 | Research and development credit carry-forward | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |
Tax loss carry-forwards expected to expire | 0 |
2033 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 | 437 |
2033 and onwards | Research and development credit carry-forward | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |
Tax loss carry-forwards expected to expire | 80 |
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 | 1,596 |
Unlimited | Research and development credit carry-forward | |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic loss per share | |||
Net loss attributable to owners of the parent | € (430) | € (34) | € (581) |
Weighted-average ordinary shares outstanding (in shares) | 192,934,862 | 191,298,397 | 187,583,307 |
Exchangeable Notes (in shares) | 2,911,500 | 2,424,921 | 0 |
Warrants (in shares) | 0 | 220,137 | 0 |
Diluted weighted average ordinary shares (in shares) | 195,846,362 | 193,943,455 | 187,583,307 |
Basic loss per share attributable to owners of the parent (euro per share) | € (2.23) | € (0.18) | € (3.10) |
Diluted loss per share | |||
Net loss attributable to owners of the parent | € (430) | € (34) | € (581) |
Fair value gains on dilutive Exchangeable Notes | (144) | (112) | 0 |
Fair value gains on dilutive warrants | 0 | (53) | 0 |
Net loss used in the computation of diluted loss per share | € (574) | € (199) | € (581) |
Shares used in computation: | |||
Diluted loss per share attributable to owners of the parent (euro per share) | € (2.93) | € (1.03) | € (3.10) |
Loss per share - Summary of Ant
Loss per share - Summary of Anti-Dilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee options | |||
Earnings per share [line items] | |||
Antidilutive securities excluded from computation of loss per share (in shares) | 16,004,890 | 8,695,348 | 9,041,288 |
Restricted stock units | |||
Earnings per share [line items] | |||
Antidilutive securities excluded from computation of loss per share (in shares) | 3,135,407 | 1,425,196 | 1,320,193 |
Other contingently issuable shares | |||
Earnings per share [line items] | |||
Antidilutive securities excluded from computation of loss per share (in shares) | 71,717 | 108,720 | 156,190 |
Warrants | |||
Earnings per share [line items] | |||
Antidilutive securities excluded from computation of loss per share (in shares) | 800,000 | 800,000 | 800,000 |
Leases - Additional Information
Leases - Additional Information (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of Leases [Line Items] | ||
Expenses relating to short-term leases | € 6 | € 7 |
Lease commitment amount for leases not commenced | € 43 | |
Weighted average incremental borrowing rate applied to lease liabilities | 6.40% | 6.30% |
Top of Range | Property and equipment | ||
Disclosure of Leases [Line Items] | ||
Expected lease term | 12 years |
Leases - Summary of Roll-forwar
Leases - Summary of Roll-forward of Lease Right-of-use Assets (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of quantitative information about right-of-use assets [line items] | ||
Beginning balance | € 437 | |
Ending balance | 417 | € 437 |
Adoption of IFRS 16 | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Beginning balance | 437 | |
Ending balance | 437 | |
Cost | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Beginning balance | 632 | 581 |
Increases | 20 | 23 |
Decreases | (2) | |
Exchange differences | 23 | 30 |
Ending balance | 675 | 632 |
Accumulated amortization | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Beginning balance | (195) | (137) |
Depreciation charge | (59) | (53) |
Decreases | 2 | |
Exchange differences | (4) | (7) |
Ending balance | € (258) | € (195) |
Leases - Summary of Roll-forw_2
Leases - Summary of Roll-forward of Lease Liabilities (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Leases [Abstract] | |||
Beginning balance | € 623 | € 608 | |
Increases | 20 | 23 | |
Payments | (96) | (85) | |
Interest expense | 41 | 40 | € 41 |
Lease incentives received | 2 | 7 | 20 |
Increases in lease incentives receivable | 0 | (2) | |
Exchange differences | 23 | 32 | |
Ending balance | € 613 | € 623 | € 608 |
Leases - Summary of Maturity An
Leases - Summary of Maturity Analysis of Lease Liabilities (Details) - EUR (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure Of Lease Commitments I F R S16 Leases [Line Items] | |||
Total lease commitments | € 841 | ||
Impact of discounting remaining lease payments | (226) | ||
Lease incentives receivable | (2) | ||
Total | 613 | € 623 | € 608 |
Lease liabilities included in the consolidated statement of financial position | |||
Current | 58 | ||
Non-current | 555 | 579 | |
Total | 613 | € 623 | € 608 |
Less than one year | |||
Disclosure Of Lease Commitments I F R S16 Leases [Line Items] | |||
Total lease commitments | 98 | ||
One to five years | |||
Disclosure Of Lease Commitments I F R S16 Leases [Line Items] | |||
Total lease commitments | 367 | ||
More than five years | |||
Disclosure Of Lease Commitments I F R S16 Leases [Line Items] | |||
Total lease commitments | € 376 |
Property and equipment - Summar
Property and equipment - Summary of Property and Equipment (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | € 372 | |
Ending balance | 348 | € 372 |
Cost | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 505 | 402 |
Additions | 19 | 81 |
Disposals | (1) | (2) |
Exchange differences | 17 | 24 |
Ending balance | 540 | 505 |
Accumulated amortization | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (133) | (89) |
Depreciation charge | (59) | (41) |
Disposals | 1 | 1 |
Exchange differences | (1) | (4) |
Ending balance | (192) | (133) |
Property and equipment | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 37 | |
Ending balance | 32 | 37 |
Property and equipment | Cost | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 83 | 56 |
Additions | 8 | 26 |
Disposals | (1) | (1) |
Exchange differences | 2 | 2 |
Ending balance | 92 | 83 |
Property and equipment | Accumulated amortization | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (46) | (36) |
Depreciation charge | (15) | (9) |
Disposals | 1 | 0 |
Exchange differences | 0 | (1) |
Ending balance | (60) | (46) |
Leasehold improvements | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 335 | |
Ending balance | 316 | 335 |
Leasehold improvements | Cost | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 422 | 346 |
Additions | 11 | 55 |
Disposals | 0 | (1) |
Exchange differences | 15 | 22 |
Ending balance | 448 | 422 |
Leasehold improvements | Accumulated amortization | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (87) | (53) |
Depreciation charge | (44) | (32) |
Disposals | 0 | 1 |
Exchange differences | (1) | (3) |
Ending balance | € (132) | € (87) |
Property and equipment - Additi
Property and equipment - Additional Information (Details) - EUR (€) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of detailed information about property, plant and equipment [abstract] | ||
Impairment charge on leasehold improvements | € 0 | € 0 |
Leasehold improvements not placed into service | € 8,000,000 | € 4,000,000 |
Goodwill and intangible asset_2
Goodwill and intangible assets - Summary of Goodwill and Intangible Assets (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance, intangible assets | € 89 | |
Ending balance, intangible assets | 127 | € 89 |
Beginning balance | 983 | |
Ending balance | 1,295 | 983 |
Internal development costs and patents | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance, intangible assets | 31 | |
Ending balance, intangible assets | 19 | 31 |
Acquired intangible assets | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance, intangible assets | 58 | |
Ending balance, intangible assets | 108 | 58 |
Goodwill | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 894 | |
Ending balance | 1,168 | 894 |
Cost | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance, intangible assets | 169 | 155 |
Additions | 5 | 13 |
Acquisition, business combination (Note 5) | 82 | 7 |
Write-off of fully amortized intangible assets | (13) | |
Exchange differences | 6 | 7 |
Ending balance, intangible assets | 262 | 169 |
Beginning balance | 1,063 | 891 |
Additions | 5 | 13 |
Acquisition, business combination (Note 5) | 303 | 113 |
Write-off of fully amortized intangible assets | (13) | |
Exchange differences | 59 | 59 |
Ending balance | 1,430 | 1,063 |
Cost | Internal development costs and patents | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance, intangible assets | 64 | 64 |
Additions | 5 | 13 |
Acquisition, business combination (Note 5) | 0 | 0 |
Write-off of fully amortized intangible assets | (13) | |
Exchange differences | 0 | 0 |
Ending balance, intangible assets | 69 | 64 |
Cost | Acquired intangible assets | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance, intangible assets | 105 | 91 |
Additions | 0 | 0 |
Acquisition, business combination (Note 5) | 82 | 7 |
Write-off of fully amortized intangible assets | 0 | |
Exchange differences | 6 | 7 |
Ending balance, intangible assets | 193 | 105 |
Cost | Goodwill | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 894 | 736 |
Additions | 0 | 0 |
Acquisition, business combination (Note 5) | 221 | 106 |
Write-off of fully amortized intangible assets | 0 | |
Exchange differences | 53 | 52 |
Ending balance | 1,168 | 894 |
Accumulated amortization | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance, intangible assets | (80) | (58) |
Amortization charge | (53) | (33) |
Write-off of fully amortized intangible assets | 13 | |
Exchange differences | (2) | (2) |
Ending balance, intangible assets | (135) | (80) |
Accumulated amortization | Internal development costs and patents | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance, intangible assets | (33) | (31) |
Amortization charge | (17) | (15) |
Write-off of fully amortized intangible assets | 13 | |
Exchange differences | 0 | 0 |
Ending balance, intangible assets | (50) | (33) |
Accumulated amortization | Acquired intangible assets | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance, intangible assets | (47) | (27) |
Amortization charge | (36) | (18) |
Write-off of fully amortized intangible assets | 0 | |
Exchange differences | (2) | (2) |
Ending balance, intangible assets | € (85) | € (47) |
Goodwill and intangible asset_3
Goodwill and intangible assets - Additional Information (Details) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 EUR (€) segment | Dec. 31, 2021 EUR (€) | Dec. 31, 2020 EUR (€) | |
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Number of operating segments | segment | 2 | ||
Percentage of weightings | 50% | ||
Research and development | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Amortization expense | € | € 40 | € 25 | € 18 |
Income Approach | Premium | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Discount rate | 11% | ||
Income Approach | Ad-Supported | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Discount rate | 13% | ||
Market Approach | Premium | Bottom of Range | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Revenue multiple used to estimate enterprise value | 1.5 | ||
Market Approach | Premium | Top of Range | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Revenue multiple used to estimate enterprise value | 1.6 | ||
Market Approach | Ad-Supported | |||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | |||
Revenue multiple used to estimate enterprise value | 1.4 |
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, 2022 | Dec. 31, 2021 |
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | ||
Goodwill | € 1,168 | € 894 |
Premium | ||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | ||
Goodwill | 274 | 129 |
Ad-Supported | ||
Disclosure Of Goodwill And Indefinite Lived Assets [Line Items] | ||
Goodwill | € 894 | € 765 |
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, 2022 | Dec. 31, 2021 |
Restricted cash | ||
Lease deposits and guarantees | € 53 | € 51 |
Other | 2 | 1 |
Other non-current assets | 23 | 25 |
Total | € 78 | € 77 |
Trade and other receivables - S
Trade and other receivables - Summary of Trade and Other Receivables (Details) - EUR (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Trade and other receivables [abstract] | ||
Trade receivables | € 509 | € 443 |
Less: allowance for expected credit losses | (7) | (6) |
Trade receivables – net | 502 | 437 |
Other | 188 | 184 |
Total | € 690 | € 621 |
Trade and other receivables -_2
Trade and other receivables - Summary of Aging of Group's Net Trade Receivables (Details) - EUR (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | € 502 | € 437 |
Financial Assets Past Due but Not Impaired | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 502 | 437 |
Financial Assets Past Due but Not Impaired | Current | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 317 | 268 |
Financial Assets Past Due but Not Impaired | Overdue 1 – 30 days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 91 | 86 |
Financial Assets Past Due but Not Impaired | Overdue 31 – 60 days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 49 | 43 |
Financial Assets Past Due but Not Impaired | Overdue 60 – 90 days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 19 | 17 |
Financial Assets Past Due but Not Impaired | Overdue more than 90 days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | € 26 | € 23 |
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, 2022 | Dec. 31, 2021 | |
Disclosure Of Trade And Other Receivables [Line Items] | ||
Beginning balance | € 6 | |
Ending balance | 7 | € 6 |
Trade Receivables | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Beginning balance | 6 | 4 |
Provision for expected credit losses | 8 | 7 |
Reversal of unutilized provisions | (2) | (2) |
Receivables written off | (5) | (3) |
Ending balance | € 7 | € 6 |
Other current assets (Details)
Other current assets (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other current assets [Abstract] | |||
Content assets | € 187 | € 161 | |
Prepaid expenses and other | 89 | 74 | |
Derivative assets | 31 | 11 | |
Total | 307 | 246 | |
Content asset amortization | € 193 | € 122 | € 48 |
Issued share capital and othe_3
Issued share capital and other reserves - Additional Information (Details) | 12 Months Ended | 16 Months Ended | |||||||||||
Aug. 23, 2021 EUR (€) shares | Aug. 23, 2021 $ / shares | Jul. 13, 2020 beneficiary_certificate shares | Jul. 01, 2019 EUR (€) shares | Jul. 01, 2019 $ / shares | Jul. 13, 2017 EUR (€) shares | Jul. 13, 2017 $ / shares | Dec. 31, 2022 beneficiary_certificate vote € / shares shares | Dec. 31, 2021 beneficiary_certificate € / shares shares | Dec. 31, 2020 € / shares shares | Dec. 31, 2022 EUR (€) beneficiary_certificate € / shares shares | Aug. 20, 2021 EUR (€) shares | Apr. 21, 2021 EUR (€) shares | |
Disclosure of classes of share capital [line items] | |||||||||||||
Authorized and subscribed shares (in shares) | 403,032,520 | 403,032,520 | 403,032,520 | 403,032,520 | |||||||||
Authorized and subscribed shares, par value (euro per share) | € / shares | € 0.000625 | € 0.000625 | € 0.000625 | € 0.000625 | |||||||||
Number of beneficiary certificates authorized | beneficiary_certificate | 1,400,000,000 | 1,400,000,000 | |||||||||||
Beneficiary certificates, issued (in beneficiary certificate per share) | beneficiary_certificate | 10 | 10 | |||||||||||
Number of beneficiary certificates held by founders | beneficiary_certificate | 349,876,040 | 350,514,260 | 349,876,040 | ||||||||||
Number of vote each beneficiary certificate entitles | vote | 1 | ||||||||||||
Amount authorized for share repurchase program | € | € 1,000,000,000 | € 510,000,000 | |||||||||||
Number of shares authorized for share repurchase program (in shares) | 10,000,000 | 4,366,427 | |||||||||||
Number of shares repurchased in period (in shares) | 469,274 | ||||||||||||
Payment for repurchase of stock | € | € 91,000,000 | ||||||||||||
Number of ordinary shares repurchased | 1,209,040 | 2,458,324 | |||||||||||
Number of treasury shares reissued (in shares) | 1,106,597 | 2,397,198 | |||||||||||
Number of ordinary shares held as treasury shares (in shares) | 3,565,542 | 3,463,099 | 3,565,542 | ||||||||||
Minimum | |||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||
Issuance ratio (in beneficiary certificate per share) | 1 | 1 | |||||||||||
Maximum | |||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||
Issuance ratio (in beneficiary certificate per share) | beneficiary_certificate | 20 | 20 | |||||||||||
Employee and Member of Management of Group | |||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||
Proceeds from warrants issued | € | € 31,000,000 | € 15,000,000 | € 9,000,000 | ||||||||||
Number of ordinary shares that can be acquired from warrants issued (in shares) | 800,000 | 800,000 | 1,600,000 | ||||||||||
Exercise price of each warrant (in dollars per share) | $ / shares | $ 281.63 | $ 190.09 | $ 89.73 | ||||||||||
Exercise price of each warrant to fair market value of ordinary shares on date of issuance | 130% | 130% | 130% | ||||||||||
Ordinary shares issued (in shares) | 1,084,043 | ||||||||||||
Number of beneficiary certificates issued | beneficiary_certificate | 10,840,430 | ||||||||||||
Number of warrants effectively net settled (in shares) | 1,600,000 | ||||||||||||
Number of ordinary shares outstanding | |||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||
Number of shares issued and fully paid (in shares) | 196,858,811 | 195,614,910 | 193,614,910 | 196,858,811 | |||||||||
Number of ordinary shares repurchased | 1,209,040 | 2,458,234 | 5,038,200 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Currency translation | |||
Currency translation, beginning balance | € 17 | € (54) | € (11) |
Currency translation | 83 | 71 | (43) |
Currency translation, ending balance | 100 | 17 | (54) |
Short term and Long term investments | |||
Tax effect of gain (loss) on sale of long term investment reclassified to accumulated deficit | (5) | 30 | |
Cash flow hedges | |||
Cash flow hedges, beginning balance | (4) | (3) | (4) |
(Losses)/gains on fair value that may be subsequently reclassified to consolidated statement of operations | 4 | (11) | 5 |
Losses/(gains) reclassified to revenue | 32 | 51 | (15) |
(Gains)/losses reclassified to cost of revenue | (20) | (40) | 11 |
Deferred tax | (2) | (1) | 0 |
Cash flow hedges, ending balance | 10 | (4) | (3) |
Share-based compensation | |||
Share-based payments, beginning balance | 869 | 680 | 494 |
Share-based compensation (Note 19) | 385 | 222 | 181 |
Income tax impact associated with share-based compensation (Note 10) | 51 | 21 | 34 |
Restricted stock units withheld for employee taxes | (40) | (54) | (29) |
Share-based payments, ending balance | 1,265 | 869 | 680 |
Other reserves, ending balance | 1,521 | 853 | 1,687 |
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 | (3) | 5 | 1 |
(Losses)/gains on fair value that may be subsequently reclassified to consolidated statement of operations | (23) | (8) | 8 |
Gains reclassified to consolidated statement of operations | 4 | (2) | (3) |
Deferred tax | 4 | 2 | (1) |
Investments, ending balance | (18) | (3) | 5 |
Reserve of gains and losses from investments in equity instruments | |||
Short term and Long term investments | |||
Investments, beginning balance | (26) | 1,059 | 444 |
(Losses)/gains on fair value that may be subsequently reclassified to consolidated statement of operations | 212 | (1,218) | 777 |
Losses/(gains) on sale of long term investment reclassified to accumulated deficit | 2 | (134) | 0 |
Tax effect of gain (loss) on sale of long term investment reclassified to accumulated deficit | (5) | 30 | 0 |
Deferred tax | (22) | 237 | (162) |
Investments, ending balance | 161 | (26) | 1,059 |
Reserve of change in fair value of financial liability attributable to change in credit risk of liability | |||
Exchangeable Notes | |||
Exchange notes beginning balance | 0 | 0 | 0 |
Gains on fair value attributable to changes in credit risk | 4 | 0 | 0 |
Deferred tax | (1) | 0 | 0 |
Exchange notes ending balance | € 3 | € 0 | € 0 |
Share-based compensation - Addi
Share-based compensation - Additional Information (Details) | 12 Months Ended | |||||
Dec. 31, 2022 $ / shares | Dec. 31, 2022 EUR (€) shares | Dec. 31, 2021 shares $ / shares | Dec. 31, 2020 shares $ / shares | Dec. 31, 2019 shares $ / shares | Dec. 31, 2017 shares | |
Disclosure Of Share Based Payments [Line Items] | ||||||
Weighted-average contractual life for stock options outstanding | 3 years 3 months 18 days | 2 years 8 months 12 days | 2 years 10 months 24 days | |||
Weighted-average share price at exercise for options exercised (in dollars per share) | $ / shares | $ 158.59 | $ 280.08 | $ 198.10 | |||
Weighted average fair value at measurement date, share options granted (in dollars per share) | $ / shares | 43.56 | $ 78.65 | $ 36.82 | |||
Expected dividend, share options granted | € | € 0 | |||||
Increase decrease in expected life | 1 year | |||||
Restricted stock units | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Number of shares granted (in shares) | 2,914,248 | 793,337 | 1,127,149 | |||
Restricted stock awards | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Number of shares granted (in shares) | 0 | 0 | 0 | |||
Other contingently issuable shares | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Number of shares granted (in shares) | 30,824 | 22,988 | 34,450 | |||
2020 Plans | Employee Stock Option Plans | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Percentage of fair value of ordinary shares | 150% | |||||
Options granted period | 5 years | |||||
2020 Plans | Employee Stock Option Plans | Minimum | Vesting Tranche After First Vesting Period | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Vesting period | 3 months | |||||
2020 Plans | Employee Stock Option Plans | Maximum | Vesting Tranche After First Vesting Period | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Vesting period | 8 months | |||||
2020 Plans | Restricted stock units | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Vesting period | 4 years | |||||
2020 Plans | Restricted stock units | Minimum | Vesting Tranche After First Vesting Period | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Vesting period | 3 months | |||||
2020 Plans | Restricted stock units | Maximum | Vesting Tranche After First Vesting Period | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Vesting period | 8 months | |||||
2017 Acquiree | Restricted stock awards | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Number of shares issued (in shares) | 61,880 | |||||
2017 Acquiree | Restricted stock awards | Bottom of Range | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Vesting period | 2 years | |||||
2017 Acquiree | Restricted stock awards | Top of Range | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Vesting period | 3 years | |||||
Anchor | Other contingently issuable shares | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Vesting period | 4 years | |||||
Number of shares granted (in shares) | 162,320 | |||||
Number of ordinary shares represented by each equity instruments granted (in shares) | 1 | |||||
Grant date fair value of each equity instrument (in dollars per share) | $ / shares | $ 145.21 | |||||
The Ringer | Other contingently issuable shares | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Vesting period | 5 years | |||||
Number of shares granted (in shares) | 34,450 | |||||
Number of ordinary shares represented by each equity instruments granted (in shares) | 1 | |||||
Grant date fair value of each equity instrument (in dollars per share) | $ / shares | $ 145.14 | |||||
Podsights | Other contingently issuable shares | ||||||
Disclosure Of Share Based Payments [Line Items] | ||||||
Vesting period | 4 years | |||||
Number of shares granted (in shares) | 30,824 | |||||
Grant date fair value of each equity instrument (in dollars per share) | $ / shares | $ 162.21 |
Share-based compensation - Sche
Share-based compensation - Schedule of Activities in RSUs, RSAs and Other Contingently Issuable Shares Outstanding and Related Information (Details) | 12 Months Ended | ||
Dec. 31, 2022 shares $ / shares | Dec. 31, 2021 shares $ / shares | Dec. 31, 2020 shares $ / shares | |
Restricted stock units | |||
Number of RSUs | |||
Beginning balance (in shares) | shares | 1,425,196 | 1,320,193 | 638,350 |
Granted (in shares) | shares | 2,914,248 | 793,337 | 1,127,149 |
Forfeited (in shares) | shares | (359,238) | (175,751) | (91,613) |
Released (in shares) | shares | (844,799) | (512,583) | (353,693) |
Ending balance (in shares) | shares | 3,135,407 | 1,425,196 | 1,320,193 |
Weighted average grant date fair value | |||
Weighted average grant date fair value, Beginning balance (in dollars per share) | $ / shares | $ 211.25 | $ 155.98 | $ 134.79 |
Weighted average grant date fair value, Granted (in dollars per share) | $ / shares | 121.42 | 277.21 | 161.50 |
Weighted average grant date fair value, Forfeited (in dollars per share) | $ / shares | 173.04 | 190.26 | 143.13 |
Weighted average grant date fair value, Released (in dollars per share) | $ / shares | 173.76 | 178.19 | 138.66 |
Weighted average grant date fair value, Ending balance in (in dollars per share) | $ / shares | $ 142.23 | $ 211.25 | $ 155.98 |
Restricted stock awards | |||
Number of RSUs | |||
Beginning balance (in shares) | shares | 0 | 0 | 41,280 |
Granted (in shares) | shares | 0 | 0 | 0 |
Forfeited (in shares) | shares | 0 | 0 | 0 |
Released (in shares) | shares | 0 | 0 | (41,280) |
Ending balance (in shares) | shares | 0 | 0 | 0 |
Weighted average grant date fair value | |||
Weighted average grant date fair value, Beginning balance (in dollars per share) | $ / shares | $ 0 | $ 0 | $ 90.65 |
Weighted average grant date fair value, Granted (in dollars per share) | $ / shares | 0 | 0 | 0 |
Weighted average grant date fair value, Forfeited (in dollars per share) | $ / shares | 0 | 0 | 0 |
Weighted average grant date fair value, Released (in dollars per share) | $ / shares | 0 | 0 | 90.65 |
Weighted average grant date fair value, Ending balance in (in dollars per share) | $ / shares | $ 0 | $ 0 | $ 0 |
Other | |||
Number of RSUs | |||
Beginning balance (in shares) | shares | 108,720 | 156,190 | 162,320 |
Granted (in shares) | shares | 30,824 | 22,988 | 34,450 |
Forfeited (in shares) | shares | (20,357) | 0 | 0 |
Released (in shares) | shares | (47,470) | (70,458) | (40,580) |
Ending balance (in shares) | shares | 71,717 | 108,720 | 156,190 |
Weighted average grant date fair value | |||
Weighted average grant date fair value, Beginning balance (in dollars per share) | $ / shares | $ 145.19 | $ 145.19 | $ 145.21 |
Weighted average grant date fair value, Granted (in dollars per share) | $ / shares | 162.21 | 261 | 145.14 |
Weighted average grant date fair value, Forfeited (in dollars per share) | $ / shares | 145.21 | 0 | 0 |
Weighted average grant date fair value, Released (in dollars per share) | $ / shares | 145.20 | 182.98 | 145.21 |
Weighted average grant date fair value, Ending balance in (in dollars per share) | $ / shares | $ 152.50 | $ 145.19 | $ 145.19 |
Share-based compensation - Sc_2
Share-based compensation - Schedule of Activity in Stock Options Outstanding and Related Information (Details) | 12 Months Ended | ||
Dec. 31, 2022 shares $ / shares | Dec. 31, 2021 shares $ / shares | Dec. 31, 2020 shares $ / shares | |
Number Of Share Options Outstanding | |||
Number of options outstanding, beginning balance (in shares) | shares | 8,695,348 | 9,041,288 | 12,153,772 |
Number of options granted (in shares) | shares | 9,640,611 | 2,164,070 | 2,356,040 |
Number of options forfeited (in shares) | shares | (1,332,946) | (414,317) | (855,051) |
Number of options exercised (in shares) | shares | (620,143) | (2,074,572) | (4,556,908) |
Number of options expired (in shares) | shares | (377,980) | (21,121) | (56,565) |
Number of options outstanding, ending balance (in shares) | shares | 16,004,890 | 8,695,348 | 9,041,288 |
Number of options, Exercisable (in shares) | shares | 6,402,109 | 4,453,983 | 4,022,571 |
Weighted Average Exercise Price of Share Options Outstanding | |||
Weighted average exercise price outstanding, beginning balance (in dollars per share) | $ / shares | $ 190.19 | $ 138.60 | $ 107.68 |
Weighted average exercise price granted (in dollars per share) | $ / shares | 141.55 | 315.86 | 180.12 |
Weighted average exercise price forfeited (in dollars per share) | $ / shares | 215.07 | 191.43 | 131.30 |
Weighted average exercise price exercised (in dollars per share) | $ / shares | 78.33 | 96.12 | 78.87 |
Weighted average exercise price expired (in dollars per share) | $ / shares | 130.86 | 196.25 | 146.69 |
Weighted average exercise price outstanding, ending balance (in dollars per share) | $ / shares | 164.56 | 190.19 | 138.60 |
Weighted average exercise price, Exercisable (in dollars per share) | $ / shares | $ 172.69 | $ 152.64 | $ 113.91 |
Share-based compensation - Summ
Share-based compensation - Summary of Stock Options Outstanding (Details) | 12 Months Ended | |||
Dec. 31, 2022 shares $ / shares | Dec. 31, 2021 shares | Dec. 31, 2020 shares | Dec. 31, 2019 shares | |
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options (in shares) | shares | 16,004,890 | 8,695,348 | 9,041,288 | 12,153,772 |
Weighted average remaining contractual life (years) | 3 years 3 months 18 days | 2 years 8 months 12 days | 2 years 10 months 24 days | |
1.65 to 45.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options (in shares) | shares | 2,289 | 3,533 | 195,207 | |
Weighted average remaining contractual life (years) | 1 year 1 month 6 days | 1 year 9 months 18 days | 3 months 18 days | |
45.01 to 90.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options (in shares) | shares | 1,147,396 | 415,340 | 1,243,833 | |
Weighted average remaining contractual life (years) | 4 years 9 months 18 days | 2 months 12 days | 1 year 2 months 12 days | |
90.01 to 135.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options (in shares) | shares | 4,036,371 | 1,659,359 | 2,234,257 | |
Weighted average remaining contractual life (years) | 3 years 3 months 18 days | 1 year 9 months 18 days | 2 years 8 months 12 days | |
135.01 to 180.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options (in shares) | shares | 6,741,590 | 3,076,253 | 3,671,417 | |
Weighted average remaining contractual life (years) | 3 years 1 month 6 days | 2 years 6 months | 3 years 6 months | |
180.01 to 498.98 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options (in shares) | shares | 4,077,244 | 3,540,863 | 1,696,574 | |
Weighted average remaining contractual life (years) | 3 years | 3 years 8 months 12 days | 3 years 7 months 6 days | |
Bottom of Range | 1.65 to 45.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Range of exercise prices (in dollars per share) | $ 7.59 | |||
Bottom of Range | 45.01 to 90.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Range of exercise prices (in dollars per share) | 45.01 | |||
Bottom of Range | 90.01 to 135.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Range of exercise prices (in dollars per share) | 90.01 | |||
Bottom of Range | 135.01 to 180.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Range of exercise prices (in dollars per share) | 135.01 | |||
Bottom of Range | 180.01 to 498.98 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Range of exercise prices (in dollars per share) | 180.01 | |||
Top of Range | 1.65 to 45.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Range of exercise prices (in dollars per share) | 45 | |||
Top of Range | 45.01 to 90.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Range of exercise prices (in dollars per share) | 90 | |||
Top of Range | 90.01 to 135.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Range of exercise prices (in dollars per share) | 135 | |||
Top of Range | 135.01 to 180.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Range of exercise prices (in dollars per share) | 180 | |||
Top of Range | 180.01 to 498.98 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Range of exercise prices (in dollars per share) | $ 498.98 |
Share-based compensation - Su_2
Share-based compensation - Summary of Black-Scholes Option-Pricing Models (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Share Based Payments [Line Items] | |||
Weighted-average share price (in dollars per share) | $ 124.47 | $ 283.15 | $ 162.82 |
Bottom of Range | |||
Disclosure Of Share Based Payments [Line Items] | |||
Expected volatility (%) | 35.90% | 34.10% | 30% |
Risk-free interest rate (%) | 0.90% | 0.20% | 0.10% |
Expected life of stock options (years) | 2 years 7 months 6 days | 2 years 7 months 6 days | 2 years 7 months 6 days |
Top of Range | |||
Disclosure Of Share Based Payments [Line Items] | |||
Expected volatility (%) | 60% | 43.10% | 42.80% |
Risk-free interest rate (%) | 4.50% | 1.10% | 1.70% |
Expected life of stock options (years) | 4 years 9 months 18 days | 4 years 9 months 18 days | 4 years 9 months 18 days |
Share-based compensation - Su_3
Share-based compensation - Summary of Impact of Changes on Stock Options Expense for Options Granted (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Share Based Payments [Line Items] | |||
Share-based compensation | € 381 | € 223 | € 176 |
Volatility decreased by 10% | |||
Stock option expense increase/(decrease) under the following assumption changes | |||
Volatility increase (decrease) by 10% | (25) | ||
Volatility increase by 10% | |||
Stock option expense increase/(decrease) under the following assumption changes | |||
Volatility increase (decrease) by 10% | 34 | ||
Expected life decrease by 1 year | |||
Stock option expense increase/(decrease) under the following assumption changes | |||
Expected life increase (decrease) by 1 year | (19) | ||
Expected life increase by 1 year | |||
Stock option expense increase/(decrease) under the following assumption changes | |||
Expected life increase (decrease) by 1 year | 24 | ||
Options Granted in 2020 | |||
Disclosure Of Share Based Payments [Line Items] | |||
Share-based compensation | € 142 |
Share-based compensation - Su_4
Share-based compensation - Summary of Expense Recognized in Consolidated Statement of Operations for Employee Share Based Payments (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Share Based Payments [Line Items] | |||
Share-based compensation | € 381 | € 223 | € 176 |
Cost of revenue | |||
Disclosure Of Share Based Payments [Line Items] | |||
Share-based compensation | 8 | 9 | 8 |
Research and development | |||
Disclosure Of Share Based Payments [Line Items] | |||
Share-based compensation | 218 | 119 | 84 |
Sales and marketing | |||
Disclosure Of Share Based Payments [Line Items] | |||
Share-based compensation | 73 | 41 | 34 |
General and administrative | |||
Disclosure Of Share Based Payments [Line Items] | |||
Share-based compensation | € 82 | € 54 | € 50 |
Exchangeable Notes - Additional
Exchangeable Notes - Additional Information (Details) $ / shares in Units, € in Millions | 1 Months Ended | ||||
Mar. 31, 2021 EUR (€) | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 EUR (€) | Mar. 02, 2021 USD ($) day $ / shares | Dec. 31, 2020 EUR (€) | |
Disclosure of detailed information about borrowings [line items] | |||||
Number of days percent of share price maintained | 5 | ||||
Number of consecutive trading days in measurement period | 10 | ||||
Exchangeable Notes Due 2026 | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Notional amount | $ | $ 1,500,000,000 | ||||
Borrowings, interest rate | 0% | ||||
Additional notional amount option | $ | $ 200,000,000 | ||||
Proceeds from borrowings | € | € 1,223 | ||||
Borrowing costs incurred | € | € 18 | ||||
Percent of share price maintained for 20 trading days during 30 day period | 130% | ||||
Number of trading days share price maintained | 20 | ||||
Number of consecutive trading days in measurement period | 30 | ||||
Minimum percent of share price maintained for 5 trading days during 10 day period | 98% | ||||
Exchange rate | 0.001941 | ||||
Exchange price (in dollars per share) | $ / shares | $ 515.20 | ||||
Trading days for redemption | 40 | ||||
Borrowings | € | € 1,128 | € 1,202 | € 0 |
Trade and other payables - Summ
Trade and other payables - Summary of Trade and Other Payables (Details) - EUR (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Trade and other payables [abstract] | ||
Trade payables | € 588 | € 534 |
Value added tax and sales taxes payable | 244 | 229 |
Other current liabilities | 13 | 30 |
Trade and other payables | € 845 | € 793 |
Trade and other payables - Addi
Trade and other payables - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 | Dec. 31, 2021 |
Non-current | ||
Other accrued liabilities | € 28 | € 37 |
Total | 28 | 37 |
Current | ||
Accrued fees to rights holders | 1,665 | 1,378 |
Accrued salaries, vacation, and related taxes | 120 | 92 |
Accrued social costs for options and RSUs | 7 | 84 |
Accrued operating liabilities | 194 | 188 |
Other accrued expenses | 107 | 99 |
Total | € 2,093 | € 1,841 |
Provisions - Summary of Changes
Provisions - Summary of Changes in Groups Provisions (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of other provisions [line items] | ||
Beginning balance ,carrying amount | € 29 | € 22 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 29 | 17 |
Reversal of unutilized amounts | (7) | (8) |
Exchange differences | 3 | |
Utilized | (25) | (2) |
Ending balance ,carrying amount | 29 | 29 |
Current portion | 26 | 22 |
Non-current portion | 3 | 7 |
Legal contingencies | ||
Disclosure of other provisions [line items] | ||
Beginning balance ,carrying amount | 4 | 4 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 6 | 0 |
Reversal of unutilized amounts | 0 | 0 |
Exchange differences | 1 | |
Utilized | (1) | 0 |
Ending balance ,carrying amount | 10 | 4 |
Current portion | 10 | 4 |
Non-current portion | 0 | 0 |
Indirect tax | ||
Disclosure of other provisions [line items] | ||
Beginning balance ,carrying amount | 8 | 11 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 4 | 4 |
Reversal of unutilized amounts | (4) | (6) |
Exchange differences | 1 | |
Utilized | (1) | (1) |
Ending balance ,carrying amount | 8 | 8 |
Current portion | 8 | 8 |
Non-current portion | 0 | 0 |
Onerous contracts | ||
Disclosure of other provisions [line items] | ||
Beginning balance ,carrying amount | 10 | 1 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 19 | 12 |
Reversal of unutilized amounts | (2) | (2) |
Exchange differences | 1 | |
Utilized | (23) | (1) |
Ending balance ,carrying amount | 5 | 10 |
Current portion | 5 | 6 |
Non-current portion | 0 | 4 |
Other | ||
Disclosure of other provisions [line items] | ||
Beginning balance ,carrying amount | 7 | 6 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 0 | 1 |
Reversal of unutilized amounts | (1) | 0 |
Exchange differences | 0 | |
Utilized | 0 | 0 |
Ending balance ,carrying amount | 6 | 7 |
Current portion | 3 | 4 |
Non-current portion | € 3 | € 3 |
Financial risk management and_3
Financial risk management and financial instruments - Additional Information (Details) $ / shares in Units, £ in Millions, kr in Millions, kr in Millions, $ in Millions, $ in Millions | 12 Months Ended | 16 Months Ended | ||||||||||||||||||||||||||
Oct. 01, 2021 EUR (€) | Aug. 23, 2021 EUR (€) shares | Aug. 23, 2021 $ / shares | Jul. 13, 2020 shares | Jul. 01, 2019 EUR (€) shares | Jul. 01, 2019 $ / shares | Jul. 13, 2017 EUR (€) shares | Jul. 13, 2017 $ / shares | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 EUR (€) | Dec. 31, 2020 EUR (€) | Dec. 31, 2022 EUR (€) shares | Dec. 31, 2022 AUD ($) | Dec. 31, 2022 GBP (£) | Dec. 31, 2022 CAD ($) | Dec. 31, 2022 NOK (kr) | Dec. 31, 2022 SEK (kr) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 AUD ($) | Dec. 31, 2021 GBP (£) | Dec. 31, 2021 CAD ($) | Dec. 31, 2021 NOK (kr) | Dec. 31, 2021 SEK (kr) | Dec. 31, 2021 USD ($) | Aug. 20, 2021 EUR (€) shares | Apr. 21, 2021 EUR (€) shares | Mar. 02, 2021 USD ($) | Apr. 01, 2019 EUR (€) | |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Number of shares authorized for share repurchase program (in shares) | shares | 10,000,000 | 4,366,427 | ||||||||||||||||||||||||||
Amount authorized for share repurchase program | € 1,000,000,000 | € 510,000,000 | ||||||||||||||||||||||||||
Number of shares repurchased in period (in shares) | shares | 469,274 | |||||||||||||||||||||||||||
Payment for repurchase of stock | € 91,000,000 | |||||||||||||||||||||||||||
Percentage of investment in counterparties and instruments | 10% | |||||||||||||||||||||||||||
Portfolio maturity period | 2 years | |||||||||||||||||||||||||||
Investment maturity period | 5 years | |||||||||||||||||||||||||||
Short term investments maximum liquidity period | 90 days | |||||||||||||||||||||||||||
Credit losses on short term investments | € 0 | € 0 | ||||||||||||||||||||||||||
Contract maximum duration | 1 year | |||||||||||||||||||||||||||
Transfers between levels | € 0 | 0 | ||||||||||||||||||||||||||
Warrants sold to acquire ordinary shares | € 31,000,000 | € 15,000,000 | € 9,000,000 | |||||||||||||||||||||||||
Ordinary shares acquired trough warrants issue (in shares) | shares | 800,000 | 800,000 | 1,600,000 | |||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 281.63 | $ 190.09 | $ 89.73 | |||||||||||||||||||||||||
Warrant exercise price number of times of fair market value of ordinary shares | 1.3 | 1.3 | 0.013 | |||||||||||||||||||||||||
Sale of long term investments | 0.667 | |||||||||||||||||||||||||||
Proceeds from sale of long-term investments | € 144,000,000 | € 0 | 144,000,000 | € 0 | ||||||||||||||||||||||||
Gains (losses) on disposals of investments | 134,000,000 | |||||||||||||||||||||||||||
Increase (decrease) through reclassification of after tax gain on sale of long-term investments, equity | € 109,000,000 | |||||||||||||||||||||||||||
Purchase price related to estimated fair value of contingent consideration | € 13,000,000 | |||||||||||||||||||||||||||
Currency risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, percent | 10% | |||||||||||||||||||||||||||
Reasonably possible change in risk variable, impact on equity | € 140,000,000 | 126,000,000 | ||||||||||||||||||||||||||
Interest rate risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, percent | 1% | |||||||||||||||||||||||||||
Reasonably possible change in risk variable, impact on pre-tax earnings | € 36,000,000 | 35,000,000 | ||||||||||||||||||||||||||
Equity price risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, percent | 10% | |||||||||||||||||||||||||||
Reasonably possible change in risk variable, impact on equity | € 1,000,000 | 18,000,000 | ||||||||||||||||||||||||||
Exchangeable Notes Due 2026 | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Notional amount | $ | $ 1,500,000,000 | |||||||||||||||||||||||||||
Borrowings, interest rate | 0% | |||||||||||||||||||||||||||
Additional notional amount option | $ | $ 200,000,000 | |||||||||||||||||||||||||||
Binomial option pricing model weight | 75% | |||||||||||||||||||||||||||
Borrowing instrument weight | 25% | |||||||||||||||||||||||||||
Exchangeable Notes Due 2026 | Equity price risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, percent | 10% | |||||||||||||||||||||||||||
Exchangeable Notes Due 2026 | Volatility risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, percent | 10% | |||||||||||||||||||||||||||
Exchangeable Notes Due 2026 | Credit risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, percent | 10,000% | |||||||||||||||||||||||||||
Warrants | Equity price risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, percent | 10% | |||||||||||||||||||||||||||
Bottom of Range | Exchangeable Notes Due 2026 | Equity price risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, range of fair values | € 1,127,000,000 | 1,127,000,000 | ||||||||||||||||||||||||||
Bottom of Range | Exchangeable Notes Due 2026 | Volatility risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, range of fair values | 1,126,000,000 | 1,126,000,000 | ||||||||||||||||||||||||||
Bottom of Range | Exchangeable Notes Due 2026 | Credit risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, range of fair values | 1,154,000,000 | 1,154,000,000 | ||||||||||||||||||||||||||
Bottom of Range | Warrants | Equity price risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, range of fair values | 1,000,000 | 52,000,000 | 1,000,000 | |||||||||||||||||||||||||
Top of Range | Exchangeable Notes Due 2026 | Equity price risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, range of fair values | 1,129,000,000 | 1,129,000,000 | ||||||||||||||||||||||||||
Top of Range | Exchangeable Notes Due 2026 | Volatility risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, range of fair values | 1,132,000,000 | 1,132,000,000 | ||||||||||||||||||||||||||
Top of Range | Exchangeable Notes Due 2026 | Credit risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, range of fair values | 1,102,000,000 | 1,102,000,000 | ||||||||||||||||||||||||||
Top of Range | Warrants | Equity price risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, range of fair values | € 2,000,000 | 95,000,000 | 2,000,000 | |||||||||||||||||||||||||
Tencent Music Entertainment Group | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Reasonably possible change in risk variable, percent | 10% | |||||||||||||||||||||||||||
Non-controlling equity interest percentage | 8% | |||||||||||||||||||||||||||
Tencent Music Entertainment Group | Bottom of Range | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Value of the long term investment | € 985,000,000 | 767,000,000 | 985,000,000 | |||||||||||||||||||||||||
Tencent Music Entertainment Group | Top of Range | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Value of the long term investment | 1,204,000,000 | 937,000,000 | 1,204,000,000 | |||||||||||||||||||||||||
D G E Investments Limited | Key management personnel of entity or parent | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Ordinary shares issued (in shares) | shares | 1,084,043 | |||||||||||||||||||||||||||
Number of warrants effectively net settled (in shares) | shares | 1,600,000 | |||||||||||||||||||||||||||
Foreign Exchange Forwards | Cash Flow Hedges | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Notional amount | $ 582 | £ 774 | $ 502 | kr 1,504 | kr 2,496 | $ 121,000,000 | $ 567 | £ 733 | $ 464 | kr 1,443 | kr 2,405 | $ 97,000,000 | ||||||||||||||||
Foreign Exchange Forwards | Revenue | Cash Flow Hedges | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Notional amount | 1,214,000,000 | 1,185,000,000 | 1,214,000,000 | 336 | 453 | 293 | 905 | 1,504 | 69,000,000 | 327 | 429 | 274 | 870 | 1,446 | 54,000,000 | |||||||||||||
Foreign Exchange Forwards | Cost of revenue | Cash Flow Hedges | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Notional amount | 859,000,000 | 835,000,000 | 859,000,000 | $ 246 | £ 321 | $ 209 | kr 599 | kr 992 | $ 52,000,000 | $ 240 | £ 304 | $ 190 | kr 573 | kr 959 | $ 43,000,000 | |||||||||||||
Financial Credit Risk | ||||||||||||||||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||||||||||||||||
Cash and cash equivalents and short term investments | € 3,350,000,000 | € 3,500,000,000 | € 3,350,000,000 |
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, 2022 | Dec. 31, 2021 |
Disclosure Of Liquidity Risk [Line Items] | ||
Short term investments | € 867 | € 756 |
Liquidity Position | ||
Disclosure Of Liquidity Risk [Line Items] | ||
Short term investments | 867 | 756 |
Cash equivalents | 1,836 | 1,970 |
Cash at bank and on hand | 647 | 774 |
Liquidity position | € 3,350 | € 3,500 |
Financial risk management and_5
Financial risk management and financial instruments - Summary of Immediate Impact on Net Loss Before Tax (Details) - Currency risk - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Swedish krona (SEK) | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
(Increase)/decrease in loss before tax | € (13) | € (14) |
British pound (GBP) | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
(Increase)/decrease in loss before tax | (18) | (8) |
U.S. dollar (USD) | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
(Increase)/decrease in loss before tax | € 68 | € 94 |
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, 2022 EUR (€) | Dec. 31, 2022 AUD ($) | Dec. 31, 2022 GBP (£) | Dec. 31, 2022 CAD ($) | Dec. 31, 2022 NOK (kr) | Dec. 31, 2022 SEK (kr) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 EUR (€) | Dec. 31, 2021 AUD ($) | Dec. 31, 2021 GBP (£) | Dec. 31, 2021 CAD ($) | Dec. 31, 2021 NOK (kr) | Dec. 31, 2021 SEK (kr) | Dec. 31, 2021 USD ($) |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Notional amount in foreign currency | $ 582 | £ 774 | $ 502 | kr 1,504 | kr 2,496 | $ 121 | $ 567 | £ 733 | $ 464 | kr 1,443 | kr 2,405 | $ 97 | ||
Revenue | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Notional amount in foreign currency | € 1,214 | 336 | 453 | 293 | 905 | 1,504 | 69 | € 1,185 | 327 | 429 | 274 | 870 | 1,446 | 54 |
Cost of revenue | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Notional amount in foreign currency | € 859 | $ 246 | £ 321 | $ 209 | kr 599 | kr 992 | $ 52 | € 835 | $ 240 | £ 304 | $ 190 | kr 573 | kr 959 | $ 43 |
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, 2022 | Dec. 31, 2021 |
Financial assets at fair value | ||
Total financial assets at fair value by level | € 3,872 | € 3,653 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 1,149 | 1,308 |
Contingent consideration | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 17 | |
Exchangeable Notes | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 1,128 | 1,202 |
Derivatives (not designated for hedging): | Warrants | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 1 | 72 |
Foreign exchange forwards | Derivatives (designated for hedging): | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 31 | 11 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 20 | 17 |
Cash equivalents: | Money market funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 1,543 | 1,970 |
Cash equivalents: | Time deposits | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 293 | |
Short term investments: | Money market funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 125 | 25 |
Short term investments: | Government securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 250 | 222 |
Short term investments: | Corporate notes | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 309 | 308 |
Short term investments: | Collateralized reverse purchase agreements | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 67 | |
Short term investments: | Fixed income funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 183 | 134 |
Long term investments | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 1,138 | 916 |
Level 1 | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 3,484 | 3,185 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 0 | 0 |
Level 1 | Contingent consideration | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 0 | |
Level 1 | Exchangeable Notes | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 0 | 0 |
Level 1 | Derivatives (not designated for hedging): | Warrants | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 0 | 0 |
Level 1 | Foreign exchange forwards | Derivatives (designated for hedging): | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 0 | 0 |
Level 1 | Cash equivalents: | Money market funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 1,543 | 1,970 |
Level 1 | Cash equivalents: | Time deposits | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 293 | |
Level 1 | Short term investments: | Money market funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 125 | 25 |
Level 1 | Short term investments: | Government securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 245 | 204 |
Level 1 | Short term investments: | Corporate notes | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Level 1 | Short term investments: | Collateralized reverse purchase agreements | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | |
Level 1 | Short term investments: | Fixed income funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 183 | 134 |
Level 1 | Long term investments | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 1,095 | 852 |
Level 2 | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 345 | 404 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 20 | 17 |
Level 2 | Contingent consideration | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 0 | |
Level 2 | Exchangeable Notes | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 0 | 0 |
Level 2 | Derivatives (not designated for hedging): | Warrants | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 0 | 0 |
Level 2 | Foreign exchange forwards | Derivatives (designated for hedging): | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 31 | 11 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 20 | 17 |
Level 2 | Cash equivalents: | Money market funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Level 2 | Cash equivalents: | Time deposits | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | |
Level 2 | Short term investments: | Money market funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Level 2 | Short term investments: | Government securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 5 | 18 |
Level 2 | Short term investments: | Corporate notes | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 309 | 308 |
Level 2 | Short term investments: | Collateralized reverse purchase agreements | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 67 | |
Level 2 | Short term investments: | Fixed income funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Level 2 | Long term investments | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Level 3 | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 43 | 64 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 1,129 | 1,291 |
Level 3 | Contingent consideration | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 17 | |
Level 3 | Exchangeable Notes | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 1,128 | 1,202 |
Level 3 | Derivatives (not designated for hedging): | Warrants | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 1 | 72 |
Level 3 | Foreign exchange forwards | Derivatives (designated for hedging): | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 0 | 0 |
Level 3 | Cash equivalents: | Money market funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Level 3 | Cash equivalents: | Time deposits | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | |
Level 3 | Short term investments: | Money market funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Level 3 | Short term investments: | Government securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Level 3 | Short term investments: | Corporate notes | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Level 3 | Short term investments: | Collateralized reverse purchase agreements | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | |
Level 3 | Short term investments: | Fixed income funds | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 0 | 0 |
Level 3 | Long term investments | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | € 43 | € 64 |
Financial risk management and_8
Financial risk management and financial instruments - Summary of Changes in Investments (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
At January 1 | € 916 | ||
At December 31 | 1,138 | € 916 | |
Tencent Music Entertainment Group | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
At January 1 | 852 | 2,228 | € 1,481 |
Changes in fair value recorded in other comprehensive income (loss) | 242 | (1,376) | 747 |
At December 31 | € 1,094 | € 852 | € 2,228 |
Financial risk management and_9
Financial risk management and financial instruments - Summary of Assumption Used to Estimate Fair Value of Warrants (Details) - Level 3 - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of significant unobservable inputs used in fair value measurement of liabilities [line items] | |||
Expected term (years) | 1 year 7 months 24 days | 1 year 6 months | |
Risk free rate (%) | 452% | 0.11% | |
Share price (US$) | $ 78.95 | $ 234.03 | $ 314.66 |
Historical Volatility for Shares, Measurement Input | |||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities [line items] | |||
Volatility (%) | 55% | 50% | |
Bottom of Range | |||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities [line items] | |||
Expected term (years) | 6 months | ||
Risk free rate (%) | 0.19% | ||
Bottom of Range | Historical Volatility for Shares, Measurement Input | |||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities [line items] | |||
Volatility (%) | 40% | ||
Top of Range | |||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities [line items] | |||
Expected term (years) | 2 years 7 months 24 days | ||
Risk free rate (%) | 0.89% | ||
Top of Range | Historical Volatility for Shares, Measurement Input | |||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities [line items] | |||
Volatility (%) | 45% |
Financial risk management an_10
Financial risk management and financial instruments - Summary of Changes in Warrants Liability (Details) - Warrants - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Changes In Warrants Liability [Line Items] | |||
Beginning balance | € 72 | € 89 | € 98 |
Issuance of warrant for cash | 0 | 31 | 0 |
Issuance of shares upon exercise of, or net settlement of, warrants | 0 | 0 | (267) |
Non cash changes recognized in profit or loss | |||
Changes in fair value recognized in consolidated statement of operations | (74) | (53) | 263 |
Effect of changes in foreign exchange rates | 3 | 5 | (5) |
Ending balance | € 1 | € 72 | € 89 |
Financial risk management an_11
Financial risk management and financial instruments - Other Long Term Investments (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of detailed information about financial instruments [abstract] | |||
At January 1 | € 64 | € 49 | € 16 |
Initial recognition of long term investment | 3 | 2 | 9 |
Changes in fair value recorded in other comprehensive (loss)/income | (25) | 158 | 29 |
Changes in fair value recognized in consolidated statement of operations | (1) | (4) | (4) |
Sale of long term investment | 0 | (144) | 0 |
Effect of changes in foreign exchange rates | 2 | 3 | (1) |
At December 31 | € 43 | € 64 | € 49 |
Financial risk management an_12
Financial risk management and financial instruments - Summary of Changes in Contingent Consideration Liability (Details) - Contingent consideration - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of detailed information about financial instruments [line items] | |||
At January 1 | € 17 | € 30 | € 27 |
Contingent consideration payments | (17) | (17) | (7) |
Changes in fair value recognized in consolidated statement of operations | 0 | 2 | 13 |
Effect of changes in foreign exchange rates | 0 | 2 | (3) |
At December 31 | € 0 | € 17 | € 30 |
Financial Risk Management an_13
Financial Risk Management and Financial Instruments - Summary of Changes in Convertible Notes (Details) - Exchangeable Notes Due 2026 - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of detailed information about borrowings [line items] | ||
Beginning Balance | € 1,202 | € 0 |
Initial recognition | 0 | 1,232 |
Changes in fair value recognized in consolidated statement of operations | (144) | (112) |
Changes in fair value recorded in other comprehensive loss | (4) | 0 |
Effect of changes in foreign exchange rates | 74 | 82 |
Ending Balance | € 1,128 | € 1,202 |
Financial risk management an_14
Financial risk management and financial instruments - Summary of Exchangeable Note Assumptions (Details) - Exchangeable Notes Due 2026 - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of detailed information about borrowings [line items] | ||
Risk free rate (%) | 4.20% | 1.15% |
Discount rate (%) | 7% | 3.90% |
Volatility (%) | 45% | 40% |
Share price (in dollars per share) | $ 78.95 | $ 234.03 |
Commitments and contingencies -
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 (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure Of Minimum Royalty Payments Associated With License Agreements [Line Items] | |||
Minimum royalty payments associated with license agreements | € 1,409 | € 3,279 | € 3,576 |
Not later than one year | |||
Disclosure Of Minimum Royalty Payments Associated With License Agreements [Line Items] | |||
Minimum royalty payments associated with license agreements | 1,111 | 788 | 317 |
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 | € 298 | € 2,491 | € 3,259 |
Commitments and contingencies_2
Commitments and contingencies - Schedule of Minimum Purchase Obligations and Service Agreements With Minimum Spend Commitments Under Noncancellable Agreements (Details) - EUR (€) € in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure Of Finance Leases And Operating Leases By Lessee [Line Items] | |||
Minimum purchase obligations and service agreements with minimum spend commitments under noncancellable agreements | € 917 | € 797 | € 898 |
Not later than one year | |||
Disclosure Of Finance Leases And Operating Leases By Lessee [Line Items] | |||
Minimum purchase obligations and service agreements with minimum spend commitments under noncancellable agreements | 485 | 362 | 279 |
Later than one year but not more than 5 years | |||
Disclosure Of Finance Leases And Operating Leases By Lessee [Line Items] | |||
Minimum purchase obligations and service agreements with minimum spend commitments under noncancellable agreements | 334 | 435 | 619 |
More than 5 years | |||
Disclosure Of Finance Leases And Operating Leases By Lessee [Line Items] | |||
Minimum purchase obligations and service agreements with minimum spend commitments under noncancellable agreements | € 98 | € 0 | € 0 |
Related Party Transaction - Sum
Related Party Transaction - Summary of Related Party Transactions (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Key management compensation | |||
Short term employee benefits | € 6 | € 4 | € 5 |
Share-based compensation | 37 | 26 | 30 |
Total key management compensation | € 43 | € 30 | € 35 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) € in Millions | Aug. 23, 2021 EUR (€) shares | Aug. 23, 2021 $ / shares | Jul. 13, 2020 beneficiary_certificate shares | Jul. 01, 2019 EUR (€) shares | Jul. 01, 2019 $ / shares | Jul. 13, 2017 EUR (€) shares | Jul. 13, 2017 $ / shares | Dec. 31, 2022 shares | Dec. 31, 2021 shares | Dec. 31, 2020 shares |
Employee and Member of Management of Group | ||||||||||
Disclosure of transactions between related parties [line items] | ||||||||||
Proceeds from warrants issued | € | € 31 | € 15 | € 9 | |||||||
Number of ordinary shares that can be acquired from warrants issued (in shares) | 800,000 | 800,000 | 1,600,000 | |||||||
Exercise price of each warrant (in dollars per share) | $ / shares | $ 281.63 | $ 190.09 | $ 89.73 | |||||||
Exercise price of each warrant to fair market value of ordinary shares on date of issuance | 130% | 130% | 130% | |||||||
Ordinary shares issued (in shares) | 1,084,043 | |||||||||
Number of beneficiary certificates issued | beneficiary_certificate | 10,840,430 | |||||||||
Number of warrants effectively net settled (in shares) | 1,600,000 | |||||||||
Subsidiaries | Netherlands | ||||||||||
Disclosure of transactions between related parties [line items] | ||||||||||
Ordinary shares issued (in shares) | 1,198,000 | 2,000,000 | 5,038,200 | |||||||
D G E Investments Limited | Certain Members of Key Management | ||||||||||
Disclosure of transactions between related parties [line items] | ||||||||||
Ordinary shares issued (in shares) | 1,084,043 | |||||||||
Number of beneficiary certificates issued | beneficiary_certificate | 10,840,430 | |||||||||
Number of warrants effectively net settled (in shares) | 1,600,000 |
Group Information - Summary of
Group Information - Summary of Company's Principal Subsidiaries (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Spotify AB | Sweden | |
Disclosure of subsidiaries [line items] | |
Name | Spotify AB |
Principal activities | Main operating company |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | Sweden |
Spotify USA Inc. | USA | |
Disclosure of subsidiaries [line items] | |
Name | Spotify USA Inc. |
Principal activities | USA operating company |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | USA |
Spotify Ltd | United Kingdom | |
Disclosure of 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% |
Country of incorporation | UK |
Spotify Spain S.L. | Spain | |
Disclosure of subsidiaries [line items] | |
Name | Spotify Spain S.L. |
Principal activities | Sales, marketing and other support services |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | Spain |
Spotify GmbH | Germany | |
Disclosure of subsidiaries [line items] | |
Name | Spotify GmbH |
Principal activities | Sales, marketing and other support services |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | Germany |
Spotify France SAS | France | |
Disclosure of subsidiaries [line items] | |
Name | Spotify France SAS |
Principal activities | Sales, marketing and other support services |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | France |
Spotify Canada Inc. | Canada | |
Disclosure of subsidiaries [line items] | |
Name | Spotify Canada Inc. |
Principal activities | Sales, marketing and other support services |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | Canada |
Spotify Australia Pty Ltd | Australia | |
Disclosure of subsidiaries [line items] | |
Name | Spotify Australia Pty Ltd |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | Australia |
Spotify Brasil Serviços De Música LTDA | Brazil | |
Disclosure of 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% |
Country of incorporation | Brazil |
Spotify Japan K.K | Japan | |
Disclosure of subsidiaries [line items] | |
Name | Spotify Japan K.K |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | Japan |
Spotify India LLP | India | |
Disclosure of subsidiaries [line items] | |
Name | Spotify India LLP |
Principal activities | Sales, distribution and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | India |
S Servicios de Música México, S.A. de C.V. | Mexico | |
Disclosure of subsidiaries [line items] | |
Name | S Servicios de Música México, S.A. de C.V. |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | Mexico |
Spotify Singapore Pte Ltd. | Singapore | |
Disclosure of subsidiaries [line items] | |
Name | Spotify Singapore Pte Ltd. |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | Singapore |
Spotify Italy S.r.l. | Italy | |
Disclosure of subsidiaries [line items] | |
Name | Spotify Italy S.r.l. |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100% |
Country of incorporation | Italy |
Events after the reporting peri
Events after the reporting period - Additional Information (Details) € in Millions | Jan. 23, 2023 EUR (€) |
Disclosure of non-adjusting events after reporting period [line items] | |
Minimum guarantee and spend commitments | € 116 |
Term of minimum guarantee and spend commitments in license agreements | 3 years |
Minimum | Reduction in employee base | |
Disclosure of non-adjusting events after reporting period [line items] | |
Expected severance cost | € 35 |
Maximum | Reduction in employee base | |
Disclosure of non-adjusting events after reporting period [line items] | |
Expected severance cost | € 45 |