Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document And Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | FY |
Trading Symbol | SPOT |
Entity Registrant Name | Spotify Technology S.A. |
Entity Central Index Key | 1,639,920 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock Shares Outstanding | 180,856,081 |
Consolidated statement of opera
Consolidated statement of operations - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Revenue | € 5,259 | € 4,090 | € 2,952 |
Cost of revenue | 3,906 | 3,241 | 2,551 |
Gross profit | 1,353 | 849 | 401 |
Research and development | 493 | 396 | 207 |
Sales and marketing | 620 | 567 | 368 |
General and administrative | 283 | 264 | 175 |
Total operating expense | 1,396 | 1,227 | 750 |
Operating loss | (43) | (378) | (349) |
Finance income | 455 | 118 | 152 |
Finance costs | (584) | (974) | (336) |
Share in (losses)/earnings of associate | (1) | 1 | (2) |
Finance income/(costs) - net | (130) | (855) | (186) |
Loss before tax | (173) | (1,233) | (535) |
Income tax (benefit)/expense | (95) | 2 | 4 |
Net loss attributable to owners of the parent | € (78) | € (1,235) | € (539) |
Net loss per share attributable to owners of the parent | |||
Basic | € (0.44) | € (8.14) | € (3.63) |
Diluted | € (0.51) | € (8.14) | € (3.63) |
Weighted-average ordinary shares outstanding | |||
Basic | 177,154,405 | 151,668,769 | 148,368,720 |
Diluted | 181,210,292 | 151,668,769 | 148,368,720 |
Consolidated statement of compr
Consolidated statement of comprehensive income (loss) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Comprehensive Income [Abstract] | |||
Net loss attributable to owners of the parent | € (78) | € (1,235) | € (539) |
Items that may be subsequently reclassified to consolidated statement of operations (net of tax): | |||
Gains/(losses) on short term investments | 1 | (1) | (4) |
Losses on cash flow hedging instruments | (1) | 0 | 0 |
Exchange differences on translation of foreign operations | (8) | (3) | (12) |
Items not to be subsequently reclassified to consolidated statement of operations (net of tax): | |||
Gain/(loss) in the fair value of long term investments | 572 | (11) | 0 |
Other comprehensive income/(loss) for the year (net of tax) | 564 | (15) | (16) |
Total comprehensive income/(loss) for the year attributable to owners of the parent | € 486 | € (1,250) | € (555) |
Consolidated statement of finan
Consolidated statement of financial position - EUR (€) € in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Non-current assets | ||
Property and equipment | € 197 | € 73 |
Intangible assets including goodwill | 174 | 162 |
Investment in associate | 0 | 1 |
Long term investments | 1,646 | 910 |
Restricted cash and other non-current assets | 65 | 54 |
Deferred tax assets | 8 | 9 |
Non-current assets | 2,090 | 1,209 |
Current assets | ||
Trade and other receivables | 400 | 360 |
Income tax receivable | 2 | 0 |
Short term investments | 915 | 1,032 |
Cash and cash equivalents | 891 | 477 |
Other current assets | 38 | 29 |
Current assets | 2,246 | 1,898 |
Total assets | 4,336 | 3,107 |
Equity | ||
Share capital | 0 | 0 |
Other paid in capital | 3,801 | 2,488 |
Treasury shares | (77) | 0 |
Other reserves | 875 | 177 |
Accumulated deficit | (2,505) | (2,427) |
Equity attributable to owners of the parent | 2,094 | 238 |
Non-current liabilities | ||
Convertible notes | 0 | 944 |
Accrued expenses and other liabilities | 85 | 56 |
Provisions | 8 | 6 |
Deferred tax liabilities | 2 | 3 |
Non-current liabilities | 95 | 1,009 |
Current liabilities | ||
Trade and other payables | 427 | 341 |
Income tax payable | 5 | 9 |
Deferred revenue | 258 | 216 |
Accrued expenses and other liabilities | 1,076 | 881 |
Provisions | 42 | 59 |
Derivative liabilities | 339 | 354 |
Current liabilities | 2,147 | 1,860 |
Total liabilities | 2,242 | 2,869 |
Total equity and liabilities | € 4,336 | € 3,107 |
Consolidated statement of chang
Consolidated statement of changes in equity/(deficit) - EUR (€) € in Millions | Total | Number of Ordinary Shares Outstanding | Share Capital | Treasury Shares | Other Paid in Capital | Other Reserves | Accumulated Deficit |
Beginning balance at Dec. 31, 2015 | € 229 | € 0 | € 797 | € 85 | € (653) | ||
Beginning balance (in shares) at Dec. 31, 2015 | 146,100,440 | ||||||
Loss for the year | (539) | 0 | 0 | 0 | (539) | ||
Other comprehensive income (loss) | € (16) | 0 | 0 | (16) | 0 | ||
Repurchases of ordinary shares, Shares | 0 | ||||||
Issuance of shares upon exercise of stock options and restricted stock units | € 33 | 0 | 33 | 0 | 0 | ||
Issuance of shares upon exercise of stock options and restricted stock units, shares | 3,823,560 | ||||||
Restricted stock units withheld for employee taxes | 0 | ||||||
Share-based payments | 53 | 0 | 0 | 53 | 0 | ||
Income tax impact associated with share-based payments | 0 | ||||||
Ending balance at Dec. 31, 2016 | (240) | 0 | 830 | 122 | (1,192) | ||
Ending balance (in shares) at Dec. 31, 2016 | 149,924,000 | ||||||
Loss for the year | (1,235) | 0 | 0 | 0 | (1,235) | ||
Other comprehensive income (loss) | € (15) | 0 | 0 | (15) | 0 | ||
Repurchases of ordinary shares, Shares | 0 | ||||||
Issuance of shares upon exercise of stock options and restricted stock units | € 29 | 0 | 29 | 0 | 0 | ||
Issuance of shares upon exercise of stock options and restricted stock units, shares | 1,723,080 | ||||||
Restricted stock units withheld for employee taxes | 0 | ||||||
Issuance of shares related to business combinations | 33 | 0 | 33 | 0 | 0 | ||
Issuance of shares related to business combinations, shares | 442,040 | ||||||
Issuance of restricted share awards related to business combination | 0 | 0 | 0 | 0 | 0 | ||
Issuance of restricted share awards related to business combination, shares | 61,880 | ||||||
Issuance of shares upon exchange of Convertible Notes | 686 | 0 | 686 | 0 | 0 | ||
Issuance of shares upon exchange of Convertible Notes, shares | 6,554,960 | ||||||
Issuance of shares in exchange for long term investment | (910) | 0 | (910) | 0 | 0 | ||
Issuance of shares in exchange for long term investment, shares | 8,552,440 | ||||||
Share-based payments | 67 | 0 | 0 | 67 | 0 | ||
Income tax impact associated with share-based payments | 3 | 0 | 0 | 3 | 0 | ||
Ending balance at Dec. 31, 2017 | 238 | 2,488 | 177 | (2,427) | |||
Ending balance (in shares) at Dec. 31, 2017 | 167,258,400 | ||||||
Loss for the year | (78) | 0 | 0 | 0 | (78) | ||
Other comprehensive income (loss) | 564 | 564 | |||||
Issuance of ordinary shares | 4 | 4 | |||||
Issuance of ordinary shares, shares | 5,776,920 | ||||||
Repurchases of ordinary shares | € (77) | € (77) | |||||
Repurchases of ordinary shares, Shares | (6,427,271) | (6,427,271) | |||||
Issuance of shares upon exercise of stock options and restricted stock units | € 163 | 0 | 163 | 0 | 0 | ||
Issuance of shares upon exercise of stock options and restricted stock units, shares | 4,816,072 | ||||||
Restricted stock units withheld for employee taxes | (2) | (2) | |||||
Issuance of shares upon exchange of Convertible Notes | 1,146 | 0 | 1,146 | 0 | 0 | ||
Issuance of shares upon exchange of Convertible Notes, shares | 9,431,960 | ||||||
Share-based payments | 88 | 0 | 0 | 88 | 0 | ||
Income tax impact associated with share-based payments | 48 | 0 | 0 | 48 | 0 | ||
Ending balance at Dec. 31, 2018 | € 2,094 | € 0 | € (77) | € 3,801 | € 875 | € (2,505) | |
Ending balance (in shares) at Dec. 31, 2018 | 180,856,081 |
Consolidated statement of cash
Consolidated statement of cash flows - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | |||
Net loss | € (78) | € (1,235) | € (539) |
Adjustments to reconcile net loss to net cash flows | |||
Depreciation of property and equipment | 21 | 46 | 32 |
Amortization of intangible assets | 11 | 8 | 6 |
Share-based payments expense | 88 | 65 | 53 |
Finance income | (455) | (118) | (152) |
Finance costs | 584 | 974 | 336 |
Income tax (benefit)/expense | (95) | 2 | 4 |
Share in losses/(earnings) of associate | 1 | (1) | 2 |
Other | 7 | (3) | 58 |
Changes in working capital: | |||
Increase in trade receivables and other assets | (61) | (112) | (60) |
Increase in trade and other liabilities | 291 | 447 | 245 |
Increase in deferred revenue | 38 | 77 | 77 |
(Decrease)/Increase in provisions | (17) | 8 | 38 |
Interest received | 18 | 19 | 5 |
Income tax (received)/paid | (9) | 2 | (4) |
Net cash flows from operating activities | 344 | 179 | 101 |
Investing activities | |||
Purchases of property and equipment | (125) | (36) | (27) |
Purchases of short term investments | (1,069) | (1,386) | (1,397) |
Sales and maturities of short term investments | 1,226 | 1,080 | 609 |
Change in restricted cash | (10) | (34) | (1) |
Other | (44) | (59) | (11) |
Net cash flows used in investing activities | (22) | (435) | (827) |
Financing activities | |||
Proceeds from issuance of Convertible Notes, net of costs | 0 | 0 | 861 |
Proceeds from exercise of share options | 163 | 29 | 33 |
Repurchases of ordinary shares | (72) | 0 | 0 |
Other | 1 | 5 | 22 |
Net cash flows from financing activities | 92 | 34 | 916 |
Net increase/(decrease) in cash and cash equivalents | 414 | (222) | 190 |
Cash and cash equivalents at January 1 | 477 | 755 | 597 |
Net foreign exchange gains/(losses) on cash and cash equivalents | 0 | (56) | (32) |
Cash and cash equivalents at December 31 | 891 | 477 | 755 |
Non-cash investing and financing activities | |||
Issuance of shares for business combinations | 0 | 33 | 0 |
Purchases of property and equipment in trade and other payables | 23 | 5 | 1 |
Repurchases of ordinary shares in trade and other payables | 5 | 0 | 0 |
Issuance of shares upon exchange of Convertible Notes | 1,145 | 686 | 0 |
Issuance of shares in exchange for long term investment | € 0 | € 910 | € 0 |
Corporate information
Corporate information | 12 Months Ended |
Dec. 31, 2018 | |
Corporate Information [Abstract] | |
Corporate information | 1 . Spotify Technology S.A. (the “Company” or “parent”) is a public limited company incorporated and domiciled in Luxembourg. The Company’s registered office is 42-44 avenue de la Gare, L1610, Luxembourg, Grand Duchy of Luxembourg. The principal activity of the Company and its subsidiaries (the “Group”) is music streaming. The Group’s premium service (“Premium Service”) provides users with unlimited online and offline high-quality streaming access to its catalog. The Premium Service offers a commercial-free music experience. 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. 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. On April 3, 2018, the Group completed a direct listing of the Company’s ordinary shares on the New York Stock Exchange (“NYSE”). |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Summary Of Significant Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2 . The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (a) The consolidated financial statements of Spotify Technology S.A. comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and have been prepared on a historical cost basis, except for securities, long term investments, convertible senior notes (“Convertible Notes”), and derivative financial instruments, which have been measured at fair value. The preparation of the consolidated financial statements in conformity with IFRS requires the application of certain critical accounting estimates and assumptions. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas involving a greater degree of judgment or complexity, or areas in which assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 3. The consolidated financial statements provide comparative information in respect of the previous periods. (b) Basis of consolidation Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. (c) An associate is an entity over which the Group has significant influence but not control or joint control. The Group accounts for its investments in associates using the equity method whereby the investment is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Group’s share of net assets of the associates since the acquisition date. The Group determines, at each reporting date, whether there is objective evidence that the investment in its associated companies is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount and the carrying amount of the investment. Any gain or loss resulting from the dilution of the Group’s interest in associates where significant influence is retained is recognized in the consolidated statement of operations in “Share in earnings of associate.” (d) Functional and reporting currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Euro, which is the Group’s reporting currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in the consolidated statement of operations within finance income or finance costs. Group companies The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into Euro as follows: • Assets and liabilities are translated at the closing rate at the reporting date; • Income and expenses for each statement of operation are translated at average exchange rates; and • All resulting exchange differences are recognized in other comprehensive income/(loss). Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the operation and translated at the closing rate at each reporting date. (e) Premium revenue The Group generates subscription revenue from the sale of the Premium Service in which customers can listen on-demand and offline. Premium Services are sold directly to end users and through partners who are generally telecommunications companies that bundle the subscription with their own services or collect payment for the stand-alone subscriptions from their end customers. The Group satisfies its performance obligation, and revenue from these services is recognized, on a straight-line basis over the subscription period. Typically, Premium Services are paid for monthly in advance. Premium partner subscription revenue is based on a per-subscriber rate in a negotiated partner agreement and may include minimum guarantees for the number of subscriptions that will be purchased from the Group. 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. When a minimum guarantee is within an agreement and the partner is not expected to meet the commitment, management has concluded the revenue is constrained to the revenue amounts for the actual subscriptions sold in a given period. The Group therefore only recognizes the associated revenue when it is highly probable that this will not result in a significant reversal of revenue when the uncertainty is resolved. The Group assesses the facts and circumstances, including whether the partner is acting as a principal or agent, of all partner revenue arrangements and then recognizes revenues either gross or net. Premium partner services, whether recognized gross or net, have one material performance obligation, that being the delivery of the Premium Service. Additionally, the Group bundles the Premium Service with third-party services and products. Revenue is allocated to each performance obligation based on a standalone selling price for bundled arrangements with multiple performance obligations. Ad-Supported revenue The Group’s advertising revenue is primarily generated through display, audio, and video advertising delivered through advertising impressions. The Group enters into arrangements with advertising agencies that purchase advertising on its platform on behalf of the agencies’ clients. These advertising arrangements are typically sold on a cost-per-thousand basis and are evidenced by an Insertion Order (“IO”) that specifies the terms of the arrangement such as the type of ad product, pricing, insertion dates, and number of impressions in a stated period. Revenue is recognized over time based on the number of impressions delivered. The Group also may offer cash rebates to advertising agencies based on the volume of advertising inventory purchased. These rebates are estimated based on expected performance and historical data and result in a reduction of revenue recognized. Additionally, the Group generates revenue through arrangements with certain suppliers to distribute advertising inventory on their ad exchange platforms for purchase on a cost-per-thousand basis. Revenue is recognized over time when impressions are delivered on the platform. (f) Advertising credits that are not transferable are issued to certain rights holders and allow them to include advertisement on the Ad-Supported Service that promote their artists and the Spotify service, such as the availability of a new single or album on Spotify. These are issued in conjunction with the Group’s royalty arrangements for nil consideration. There is no revenue recognized as the advertising credits are mutually beneficial to both the rights holders and the Group and do not meet the definition of a revenue contract under IFRS 15, Revenue from Contracts with Customers. (g) 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. 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. (h) Cost of revenue consists predominately of royalty and distribution costs related to content streaming. The Group incurs royalty costs paid to certain music record labels, music publishers, and other rights holders for the right to stream music to the Group’s users. Royalties are typically calculated using negotiated rates in accordance with license agreements and are based on either subscription and advertising revenue earned, user/usage measures, or a combination of these. The determination of the amount of the rights holders’ liability is complex and subject to a number of variables, including the revenue recognized, the type of content streamed and the country in which it is streamed, the service tier such content is streamed on, identification of the appropriate license holder, size of user base, ratio of Ad-Supported Users to Premium Subscribers, and any applicable advertising fees and discounts, among other variables. Some rights holders have allowed the use of their content on the platform while negotiations of the terms and conditions are ongoing. In such situations, royalties are calculated using estimated rates. In certain jurisdictions, rights holders have several years to claim royalties for musical compositions and therefore estimates of the royalties payable are made until payments are made. The Group has certain arrangements whereby royalty costs are paid in advance or are subject to minimum guaranteed amounts. An accrual is established when actual royalty costs to be incurred during a contractual period are expected to fall short of the minimum guaranteed amounts. For minimum guarantee arrangements, for which the Group cannot reliably predict the underlying expense, the Group will expense the minimum guarantee on a straight-line basis over the term of the arrangement. The Group also has certain royalty arrangements where the Group would have to make additional payments if the royalty rates were below those paid to other similar licensors (most favored nation clauses). For rights holders with this clause, a comparison is done of royalties incurred to date plus estimated royalties payable for the remainder of the period to estimates of the royalties payables to other appropriate rights holders, and the shortfall, if any, is recognized on a straight-line basis over the period of the applicable most favored nation clause. An accrual and expense is recognized when it is probable that the Group will make additional royalty payments under these terms. The expense related to these accruals is recognized in cost of revenue. Cost of revenue also includes credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as amounts incurred to produce content for the service. (i) Research and development expenses are primarily comprised of costs incurred for development of products related to the Group’s platform and service, as well as new advertising products and improvements to the Group’s mobile app, desktop, and streaming services. The costs incurred include related employee compensation and benefits, facility costs, IT costs and consulting costs. (j) Sales and marketing expenses are primarily comprised of employee compensation and benefits, live events and trade shows, public relations, branding, consulting expenses, customer acquisition costs, advertising, the cost of working with record labels and artists to promote the availability of new releases on the Group’s platform, and the costs of providing free trials of the Premium Service. Expenses included in the costs of providing free trials are primarily derived from per user royalty fees determined in accordance with the rights holder agreements. (k) General and administrative expenses are comprised primarily of employee compensation and benefits for functions such as finance, accounting, analytics, legal, human resources, consulting fees, and other costs including facility and equipment costs. (l) The tax expense for the period comprises current and deferred tax. Tax is recognized in the consolidated statement of operations except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income. (i) Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. (ii) Deferred tax Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for: • Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; • Temporary differences related to investments in subsidiaries, and associates to the extent that the Group is able to control the timing of the reversal of the temporary differences, and it is probable that they will not reverse in the foreseeable future; and • Taxable temporary differences arising on the initial recognition of goodwill. Deferred tax assets are recognized for unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available, against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if certain criteria are met. (iii) Uncertain tax positions In determining the amount of current and deferred income tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes, interest or penalties may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Group to change its judgment regarding the adequacy of existing tax liabilities. Such changes to tax liabilities will impact tax expense in the period that such a determination is made. (m) Property and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes any expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the Group. The Group adds to the carrying amount of an item of property and equipment the cost of replacing parts of such an item if the replacement part is expected to provide incremental future benefits to the Group. All repairs and maintenance are charged to the consolidated statement of operations during the period in which they are incurred. After assets are placed into service, depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method as follows: • Property and equipment: 3 to 5 years • Leasehold improvements: shorter of the lease term or useful life The assets’ residual values, useful lives, and depreciation methods are reviewed annually and adjusted prospectively if there is an indication of a significant change. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the consolidated statement of operations when the asset is derecognized. (n) Acquired intangible assets other than goodwill comprise acquired developed technology 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 2 to 5 years and are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization of intangible assets is recognized in the consolidated statement of operations in the expense category consistent with the function of the intangible assets. (o) Goodwill is the excess of the consideration transferred over the net identifiable assets acquired and liabilities assumed. Goodwill is tested annually for impairment, or more regularly if certain indicators are present. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the operating segments that are expected to benefit from the synergies of the combination and represent the lowest level at which the goodwill is monitored for internal management purposes. Goodwill is evaluated for impairment by comparing the recoverable amount of the Group’s operating segments to the carrying amount of the operating segments to which the goodwill relates. If the recoverable amount is less than the carrying amount an impairment charge is determined. The recoverable amount of the operating segments is based on fair value less costs of disposal. The Group believes reasonable estimates and judgments have been used in assessing the recoverable amounts. (p) Assets that are subject to depreciation or amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognized in the consolidated statement of operations consistent with the function of the assets, for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows. Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal each reporting period. (q) (i) Financial assets Initial recognition and measurement The Group’s financial assets are comprised of cash and cash equivalents, short term investments, trade and other receivables, derivative assets, long term investments, restricted cash, and other non-current assets. All financial assets are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. Purchases and sales of financial assets are recognized on the settlement date; the date that the Group receives or delivers the asset. The Group classifies its financial assets primarily as cash and cash equivalents, receivables and short term investments, which are primarily debt instruments at fair value through other comprehensive income. 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 15. Short term investments are primarily comprised of debt instruments carried at fair value through other comprehensive income. The securities in this category are those that are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions (therefore not recognized at amortized cost). These meet both the hold to collect and sell business model and solely payments of principal and interest contractual cash flows tests under IFRS 9 Financial Instruments Long term investments are primarily comprised of equity instruments carried at fair value through other comprehensive income based on the irrevocable election made at initial recognition under IFRS 9. The securities within this category are intended to be held for an indefinite period of time and for strategic investment purposes. These are neither held for trading nor contingent consideration recognised by an acquirer in a business combination. These are classified as non-current assets. Subsequent measurement After initial measurement, short term investments are measured at fair value with unrealized gains or losses recognized in other comprehensive income and credited in other reserves within equity until the investment is derecognized, at which time, the cumulative gain or loss is recognized in finance income/costs, or the investment is determined to be impaired, when the cumulative loss is reclassified from the short term investments reserve to the consolidated statement of operations in finance costs. Interest earned whilst holding the short term investments is reported as interest income using the effective interest method. Interest income and foreign exchange revaluation are recognized in the statement of operations in the same manner as all other financial assets. After initial measurement, long term investments are measured at fair value with unrealized gains or losses, including any related foreign exchange impacts, recognized in other comprehensive income and credited in other reserves within equity without recognizing fair value changes to profit and loss upon derecognition Derecognition Financial assets are derecognized when the rights to receive cash flows from the asset have expired. Impairment of financial assets The Group assesses at each reporting date whether there is any evidence that a financial asset or a group of financial assets is impaired, primarily its trade receivables and short term investments. The Group assesses impairment for its financial assets, excluding trade receivables, using the general expected credit losses model. Under this model, the Group calculates the allowance for credit losses by considering on a discounted basis, the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance on the financial asset is the sum of these probability-weighted outcomes. For the Group’s short term investments, the Group applies the low credit risk simplification as it does not believe there to be any credit risk related to these assets given the credit quality ratings required by the Group’s investment policy. At every reporting date, the Group evaluates whether a particular debt instrument is considered to have low credit risk using all supportable information. The Group’s long term investments are not assessed for impairment due to the irrevocable election made under IFRS 9 Financial Instruments The Group uses the simplified approach for measuring impairment for its trade receivables as these financial assets do not have a significant financing component as defined under IFRS 15, Revenue from Contracts with Customers (ii) Financial liabilities Initial recognition and measurement The Group’s financial liabilities are comprised of trade and other payables, other liabilities, and derivative liabilities (warrants and instruments designated for hedging). Prior to April 3, 2018, financial liabilities also included Convertible Notes and contingent options. All financial liabilities are recognized initially at fair value and, in the case of Convertible Notes, net of directly attributable transaction costs. The Group accounted for the Convertible Notes in accordance with IAS 39, Financial Instruments: Recognition and Measurement Financial Instruments The Group accounts for the warrants as a financial liability at fair value. In accordance with IAS 32, Financial Instruments: Presentation Subsequent measurements Other financial liabilities After initial recognition, payables are subsequently measured at amortized cost using the effective interest method. The effective interest method amortization is included in finance costs in the consolidated statement of operations. Gains and losses are recognized in the consolidated statement of operations when the liabilities are derecognized. Payables are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Financial liabilities at fair value through profit or loss After initial recognition, financial liabilities at fair value through the profit or loss are subsequently re-measured at fair value at the end of each reporting period with changes in fair value recognized in finance income or finance costs in the consolidated statement of operations. Derecognition Financial liabilities are derecognized when the obligation under the liability is discharged, cancelled, or expires. (iii) Fair value measurements For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price the Group would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Group’s market assumptions. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, are described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities; • Level 2: other techniques for which inputs are based on quoted prices for identical or similar instruments in markets that are not active, quoted prices for similar instruments in active markets, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the asset or liability; • Level 3: techniques which use inputs that have a significant effect on the recognized fair value that require the Group to use its own assumptions about market participant assumptions. The Group maintains policies and procedures to determine the fair value of financial assets and liabilities using what it considers to be the most relevant and reliable market participant data available. It is the Group’s policy to maximize the use of observable inputs in the measurement of its Level 3 fair value measurements. To the extent observable inputs are not available, the Group utilizes unobservable inputs based upon the assumptions market participants would use in valuing the asset or liability. In determining the fair value of financial assets and liabilities employing Level 3 inputs, the Group considers such factors as the current interest rate, equity market, currency and credit environments, expected future cash flows, the probability of certain future events occurring, and other published data. The Group performs a variety of procedures to assess the reasonableness of its fair value determinations including the use of third parties. (iv) Foreign exchange forward contracts The Group designates certain foreign exchange forward contracts as cash flow hedges when all the requirements in IFRS 9 Financial Instruments Financial Instruments Financial Instruments (r) Cash and cash equivalents comprise cash on deposit at banks and on hand and short term deposits with a maturity of three months or less from the date of purchase that are not subject to restrictions. Cash deposits that have restrictions governing their use are classified as restricted cash, current or non-current, based on the remaining length of the restriction. The Group classifies highly liquid investments with maturities of three months or less at the date of purchase as cash equivalents. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short term deposits as defined above. (s) The Group invests in a variety of instruments, such as commercial paper, money market funds, corporate debt securities, collateralized reverse purchase agreements, and government and government agency debt securities. Part of these investments are held in short duration fixed income portfolios. The average duration of these portfolios is less than one year. All investments are governed by an investment policy and are held in highly-rated counterparties. Separate credit limits are assigned to each counterparty in order to minimize risk concentration. These investments are classified as debt instruments and are carried at fair value with the unrealized gains and losses reported as a component of equity. Management determines the appropriate classification of investments at the time of purchase and re-evaluates whether the investments pass both the hold to collect and sell and solely payments of principal and interest tests. The short term investments with maturities greater than twelve months are classified as short term when they are intended for use in current operations. The cost basis for investments sold is based upon the specific identification method. (t) Long term investments consist of non-controlling equity interests in public and private companies where the Group does not exercise significant influence. The investments are classified as equity instruments carried at fair value through other comprehensive income. Refer to Note 22. (u) Ordinary shares are classified as equity. Equity instruments are initially measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. For the years ended December 31, 2015, 2013, and 2012, the Group issued equity instruments that were part of a compound transaction whereby additional shares would be issued to the shareholders upon the occurrence of certain events (see Note 16). The embedded derivatives were separated from the host contract and the resulting derivative liabilities were initially measured at fair value. The derivative liabilities are re-measured at fair value through the consolidated statement of operations at ea |
Critical accounting estimates a
Critical accounting estimates and judgments | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Changes In Accounting Estimates [Abstract] | |
Critical accounting estimates and judgments | 3 . The preparation of the consolidated financial statements requires management to make judgments, estimates, and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, and equity in the consolidated financial statements and the accompanying disclosures. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The areas where assumptions and estimates are significant to the consolidated financial statements are: (i) The Group measures the cost of equity-settled transactions with employees and non-employees by reference to the fair value of the equity instruments at the date at which they are granted. Prior to April 3, 2018, the fair value was estimated using a model which required the determination of the appropriate inputs, specifically ordinary share price. Subsequent to the Group’s direct listing, ordinary share price is no longer based on significant assumptions and estimates. The assumptions and models used for estimating the fair value of share-based payment transactions are disclosed in Note 17. (ii) Prior to April 3, 2018, the fair value of the Group’s Convertible Notes, warrants, contingent options, and long term investments were estimated using valuation techniques using inputs based on management’s judgment and conditions that existed at each reporting date. On April 3, 2018, the Group derecognized the Convertible Notes and contingent options. Subsequent to December 12, 2018, the fair value of the Group’s investment in TME is based on inputs within Level 1 of the fair value hierarchy as disclosed in Note 2. The assumptions and models used for estimating the fair value of the instruments are disclosed in Note 22. (iii) The Group has fiscal loss carry-forwards. At period end, the Group investigates the possibility of recognizing deferred tax assets with regard to the loss carry-forwards. Deferred tax assets related to loss carry-forwards are recognized only in those cases where it is probable and there is convincing evidence that the Group will generate future taxable income to which the loss carry-forward can be utilized. See Note 10. (iv) In accordance with the accounting policy described in Note 2, the Group annually performs an impairment test regarding goodwill. The assumptions used for estimating fair value and assessing available headroom based on conditions that existed at the testing date are disclosed in Note 13. (v) The Group’s agreements and arrangements with rights holders for the content used on its platform are complex. Some rights holders have allowed the use of their content on the platform while negotiations of the terms and conditions are ongoing. In certain jurisdictions, rights holders have several years to claim royalties for musical composition and therefore estimates of the royalty accruals are based on available information and historical trends. The determination of royalty accruals involves significant judgements, assumptions, and estimates of the amounts to be paid. See Note 20. (vi) Management makes significant assumptions and estimates when determining the amounts to record for provision for legal contingencies. See Note 21. |
Revenue recognition
Revenue recognition | 12 Months Ended |
Dec. 31, 2018 | |
Contract Liabilities [Abstract] | |
Revenue recognition | 4 . Revenue from contracts with customers (i) The Group discloses revenue by reportable segment and geographic area in Note 6. (ii) The Group discloses its policies for how it identifies, satisfies, and recognizes its performance obligations associated with its contracts with customers in Note 2. (iii) Contract liabilities The Group’s contract liabilities from contracts with customers consist only of deferred revenue. Deferred revenue is mainly comprised of subscription fees collected for services not yet performed and therefore the revenue has not been recognized. Revenue is recognized over time as the services are performed. As of December 31, 2018 and 2017, the Group had deferred revenue of €258 million and €216 million, respectively. The increase in deferred revenue in 2018 is a result of an increase in the number of Premium Subscribers. This balance will be recognized as revenue as the services are performed, which is generally expected to occur over a period up to a year. Revenue recognized that was included in the contract liability balance at the beginning of the years ended December 31, 2018, 2017, and 2016 is €210 million, €149 million, and €92 million respectively. |
Business combinations
Business combinations | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Business Combinations [Abstract] | |
Business combinations | 5 . During 2017, the Group acquired the operations of five separate businesses. The acquisitions were accounted for under the acquisition method. The total purchase consideration paid was €85 million, of which €52 million was in cash and €33 million in equity. Of the total purchase consideration, €71 million has been recorded to goodwill, €17 million to acquired intangible assets, €4 million to deferred tax liabilities, and €1 million to tangible assets. The goodwill of €71 million represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including an experienced workforce and expected future synergies. Included in the arrangements are payments that are contingent on continued employment. The payments are recognized as remuneration for post-combination services and are automatically forfeited if employment terminates. A total of up to €22 million of post-combination cash pay-outs will be recorded as compensation expense over service periods of up to three years. Included in one of the arrangements are 61,880 restricted stock awards that are contingent on continued employment and are accounted for as equity-settled share-based payment transactions. A total of €6 million of post-combination expense will be recorded over the service period of two- and three-years from the acquisition date if not forfeited by the employees (see Note 17). |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Operating Segments [Abstract] | |
Segment information | 6 . The Group has two reportable segments: Premium and Ad-Supported. The Premium Service is a paid service in which customers can listen on-demand and offline. Revenue is generated through subscription fees. The Ad-Supported Service is free to the user. Revenue is generated through the sale of advertising. Royalty costs are primarily recorded in each segment based on specific rates for each segment agreed to with rights holders. The remaining royalties that are not specifically associated to either of the segments are allocated based on user activity or the revenue recognized in each segment. No operating segments have been aggregated to form the reportable segments. Key financial performance measures of the segments including revenue, cost of revenue, and gross profit are as follows: 2018 2017 2016 (in € millions) Premium Revenue 4,717 3,674 2,657 Cost of revenue 3,461 2,868 2,221 Gross profit 1,256 806 436 Ad-Supported Revenue 542 416 295 Cost of revenue 445 373 330 Gross (loss)/profit 97 43 (35 ) Consolidated Revenue 5,259 4,090 2,952 Cost of revenue 3,906 3,241 2,551 Gross profit 1,353 849 401 Reconciliation of gross profit General expenditures, finance income, finance costs, and the Group’s share in losses or earnings of an associate are not allocated to individual segments as these are managed on an overall group basis. The reconciliation between reportable segment gross profit to our loss before tax is as follows: 2018 2017 2016 (in € millions) Segment gross profit 1,353 849 401 Research and development (493 ) (396 ) (207 ) Sales and marketing (620 ) (567 ) (368 ) General and administrative (283 ) (264 ) (175 ) Finance income 455 118 152 Finance costs (584 ) (974 ) (336 ) Share in (losses)/earnings of associate (1 ) 1 (2 ) Loss before tax (173 ) (1,233 ) (535 ) Revenue by country 2018 2017 2016 (in € millions) United States 1,973 1,577 1,173 United Kingdom 576 444 342 Luxembourg 3 3 1 Other countries 2,707 2,066 1,436 5,259 4,090 2,952 Premium revenue is attributed to a country based on where the membership originates. Ad-Supported revenue is attributed to a country based on where the advertising campaign is viewed. There are no countries that individually make up greater than 10% of total revenue included in “Other countries.” Non-current assets by country Non-current assets for this purpose consists of property and equipment. 2018 2017 2016 (in € millions) Sweden 29 32 12 United States 142 28 50 United Kingdom 19 6 19 Other countries 7 7 4 197 73 85 As of December 31, 2018, 2017, and 2016, the Group held no property and equipment in Luxembourg. |
Personnel expenses
Personnel expenses | 12 Months Ended |
Dec. 31, 2018 | |
Classes Of Employee Benefits Expense [Abstract] | |
Personal expenses | 7 . 2018 2017 2016 (in € millions, except employee data) Wages and salaries 409 348 231 Social costs 90 136 38 Contributions to retirement plans 20 17 12 Share-based payments 88 65 53 Other employee benefits 60 48 39 667 614 373 Average full-time employees 3,651 2,960 2,084 2018 2017 2016 (in € millions, except employee data) Wages and salaries 409 348 231 Social costs 90 136 38 Contributions to retirement plans 20 17 12 Share-based payments 88 65 53 Other employee benefits 60 48 39 667 614 373 Average full-time employees 3,651 2,960 2,084 |
Auditor remuneration
Auditor remuneration | 12 Months Ended |
Dec. 31, 2018 | |
Auditors Remuneration [Abstract] | |
Auditor remuneration | 8 . 2018 2017 2016 (in € millions) Auditor fees 4 5 4 |
Finance income and costs
Finance income and costs | 12 Months Ended |
Dec. 31, 2018 | |
Finance Income And Costs [Abstract] | |
Finance income and costs | 9 . 2018 2017 2016 (in € millions) Finance income Fair value movements on derivative liabilities (Note 22) 376 97 23 Interest income 25 19 5 Other financial income 11 2 — Foreign exchange gains 43 — 124 Total 455 118 152 Finance costs Fair value movements on derivative liabilities (Note 22) (360 ) (303 ) (48 ) Fair value movements on Convertible Notes (Note 22) (201 ) (524 ) (245 ) Interest, bank fees and other costs (6 ) (4 ) (5 ) Foreign exchange losses (17 ) (143 ) (38 ) Total (584 ) (974 ) (336 ) |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Income Tax [Abstract] | |
Income tax | 10 . 2018 2017 2016 (in € millions) Current tax expense/(benefit) Current year 41 6 5 Changes in estimates in respect to prior year — 1 (1 ) 41 7 4 Deferred tax (benefit)/expense Temporary differences (123 ) (5 ) (1 ) Change in recognition of deferred tax (14 ) — — Change in tax rates 1 — 1 (136 ) (5 ) — Income tax (benefit)/expense (95 ) 2 4 For the years ended December 31, 2018, 2017, and 2016, the Group recorded an income tax expense of €147 million, €0 million, and €0 million, respectively, in other comprehensive loss related to components of other comprehensive income/loss. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. In 2018, the Group had recognized current income tax expense of €1 million for provisions and have cumulatively recorded liabilities of €2 million for income tax provisions at December 31, 2018, of which €1 million is reasonably expected to be resolved within twelve months. A reconciliation between the reported tax expense for the year, and the theoretical tax expense that would arise when applying the statutory tax rate in Luxembourg of 26.01%, 27.08%, and 29.22%, and on the consolidated loss before taxes for the years ended December 31, 2018, 2017, and 2016, respectively, is shown in the table below: 2018 2017 2016 (in € millions) Loss before tax (173 ) (1,233 ) (535 ) Tax using the Luxembourg tax rate (45 ) (334 ) (156 ) Effect of tax rates in foreign jurisdictions (11 ) (10 ) 15 Permanent differences (7 ) 15 12 Change in unrecognized deferred taxes (43 ) 329 132 Deferred tax on foreign exchange differences 8 — — Other 3 2 1 Income tax (benefit)/expense (95 ) 2 4 In 2018, the Group recognized deferred tax expense of €8 million as a result of foreign exchange differences on its investment in TME. The Group will be subject to deferred tax in future periods as a result of foreign exchange movements between USD, EUR, and SEK, primarily related to its investment in TME. The major components of deferred tax assets and liabilities are comprised of the following: 2018 2017 (in € millions) Intangible assets (1 ) (4 ) Share-based compensation 6 4 Tax losses carried forward 147 3 Property and equipment 5 3 Unrealized gains (154 ) — Other 3 — Net tax 6 6 A reconciliation of net deferred tax is shown in the table below: 2018 2017 2016 (in € millions) At January 1 6 3 4 Movement recognized in consolidated statement of operations 136 5 1 Movement recognized in consolidated statement of changes in equity and other comprehensive income (136 ) 2 (2 ) Movement due to acquisition — (4 ) — At December 31 6 6 3 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 2018 2017 (in € millions) Deferred tax assets 8 9 Deferred tax liabilities 2 3 Deferred tax assets have not been recognized in respect of the following items, because it is not probable that future taxable profit will be available against which the Group can use the benefits. 2018 2017 (in € millions) Intangible assets 72 74 Share-based compensation 34 115 Tax losses carried forward 148 258 Unrealized losses 2 114 Property and equipment — 4 Foreign tax credits — 4 Other 20 12 276 581 At December 31, 2018, no deferred tax liability had been recognized on investments in subsidiaries. The Company has concluded it has the ability and intention to control the timing of any distribution from its subsidiaries and will only do so in a tax advantageous manner. It is not practicable to calculate the unrecognized deferred tax liability on investments in subsidiaries. Tax loss carry-forwards as at December 31, 2018 were expected to expire as follows: Expected expiry 2018-2026 2027 and onwards Unlimited Total (in € millions) Tax loss carry-forwards — 467 1,164 1,631 Foreign tax credits 5 — — 5 The Group has significant net operating loss carry-forwards in the United States and Sweden. In certain jurisdictions, if the Group is unable to earn sufficient income or profits to utilize such carry-forwards before they expire, they will no longer be available to offset future income or profits. In Sweden, utilization of these net operating loss carry-forwards may be subject to a substantial annual limitation if there is an ownership change within the meaning of Chapter 40, paragraphs 10-14, of the Swedish Income Tax Act (the “Swedish Income Tax Act”). In general, an ownership change, as defined by the Swedish Income Tax Act results from a transaction or series of transactions over a five-year period resulting in an ownership change of more than 50% of the outstanding stock of a company by certain categories or individuals, businesses or organizations. In addition, in the United States, utilization of these net operating loss carry-forwards may be subject to a substantial annual limitation if there is an ownership change within the meaning of Section 382 of the Internal Revenue Code (“Section 382”). In general, an ownership change, as defined by Section 382, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50% of the outstanding stock of a company by certain stockholders or public groups. Since the Group formation, the Group has raised capital through the issuance of capital stock on several occasions, and the Group may continue to do so, which, combined with current or future shareholders’ disposition of ordinary shares, may have resulted in such an ownership change. Such an ownership change may limit the amount of net operating loss carry-forwards that can be utilized to offset future taxable income. The Group’s most significant tax jurisdictions are Sweden and the U.S. (both at the federal level and in various state jurisdictions). Because of its tax loss and tax credit carry-forwards, substantially all of the Group’s tax years after 2012 remain open to federal, state, and foreign tax examination. Certain of the Group’s subsidiaries are currently under examination by the Swedish, U.S. and other foreign tax authorities for tax years from 2013-2017. These examinations may lead to adjustments to the Group’s taxes. |
Loss per share
Loss per share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Loss per share | 11 . Basic loss per share is computed using the weighted-average number of outstanding ordinary shares during the period. Diluted loss per share is computed using the treasury stock method to the extent that the effect is dilutive by using the weighted-average number of outstanding ordinary shares and potential ordinary shares during the period. The Group’s potential ordinary shares consist of incremental shares issuable upon the assumed exercise of stock options and warrants, and the incremental shares issuable upon the assumed vesting of unvested restricted stock units and restricted stock awards, excluding all anti-dilutive ordinary shares outstanding during the period. The Group used the if-converted method to calculate the dilutive impact of the warrants and adjusted the numerator for changes in profit or loss. The computation of loss per share for the respective periods is as follows: 2018 2017 2016 (in € millions, except share and per share data) Basic loss per share Net loss attributable to owners of the parent (78 ) (1,235 ) (539 ) Shares used in computation: Weighted-average ordinary shares outstanding 177,154,405 151,668,769 148,368,720 Basic net loss per share attributable to owners of the parent (0.44 ) (8.14 ) (3.63 ) Diluted loss per share Net loss attributable to owners of the parent (78 ) (1,235 ) (539 ) Fair value adjustments on warrants (14 ) — — Net loss used in the computation of diluted loss per share (92 ) (1,235 ) (539 ) Shares used in computation: Weighted-average ordinary shares outstanding 177,154,405 151,668,769 148,368,720 Warrants 4,055,887 — — Diluted weighted average ordinary shares 181,210,292 151,668,769 148,368,720 Diluted net loss per share attributable to owners of the parent (0.51 ) (8.14 ) (3.63 ) Potential dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: 2018 2017 2016 Employee options 12,243,526 14,646,720 10,976,480 Restricted stock units 100,383 195,937 501,480 Restricted stock awards 61,880 61,880 — Warrants — 6,720,000 5,120,000 |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Property Plant And Equipment [Abstract] | |
Property and equipment | 12 . Property and equipment Leasehold improvements Total (in € millions) Cost At January 1, 2017 111 51 162 Additions 10 29 39 Disposals (11 ) (2 ) (13 ) Exchange differences (5 ) (5 ) (10 ) At December 31, 2017 105 73 178 Additions 3 142 145 Disposals (46 ) (1 ) (47 ) Exchange differences (1 ) 2 1 At December 31, 2018 61 216 277 Accumulated depreciation At January 1, 2017 (62 ) (15 ) (77 ) Depreciation charge (37 ) (9 ) (46 ) Disposals 11 2 13 Exchange differences 4 1 5 At December 31, 2017 (84 ) (21 ) (105 ) Depreciation charge (12 ) (9 ) (21 ) Disposals 45 — 45 Exchange differences 1 — 1 At December 31, 2018 (50 ) (30 ) (80 ) Cost, net accumulated depreciation At December 31, 2017 21 52 73 At December 31, 2018 11 186 197 In 2017, the Group shortened the useful life of certain equipment due to a planned transition to the cloud and recorded accelerated depreciation of €11 million. The Group had no such charges in 2018. The Group had €113 million and €10 million of leasehold improvements that were not placed into service as of December 31, 2018 and December 31, 2017, respectively. |
Intangible assets including goo
Intangible assets including goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets And Goodwill [Abstract] | |
Intangible assets including goodwill | 13 . Internal development costs and patents Acquired intangible assets Total Goodwill Total (in € millions) Cost At January 1, 2017 8 12 20 73 93 Additions 12 — 12 — 12 Acquisition, business combination (Note 5) — 17 17 71 88 Write off of fully amortized intangibles (2 ) (11 ) (13 ) — (13 ) Exchange differences — (1 ) (1 ) (9 ) (10 ) At December 31, 2017 18 17 35 135 170 Additions 8 — 8 — 8 Acquisition, business combination — 3 3 8 11 Exchange differences — 1 1 3 4 At December 31, 2018 26 21 47 146 193 Accumulated amortization At January 1, 2017 (3 ) (10 ) (13 ) — (13 ) Amortization charge (5 ) (3 ) (8 ) — (8 ) Write off of fully amortized intangibles 2 11 13 — 13 At December 31, 2017 (6 ) (2 ) (8 ) — (8 ) Amortization charge (6 ) (5 ) (11 ) — (11 ) At December 31, 2018 (12 ) (7 ) (19 ) — (19 ) Cost, net accumulated amortization At December 31, 2017 12 15 27 135 162 At December 31, 2018 14 14 28 146 174 Amortization of €11 million, €8 million and €5 million in 2018, 2017, and 2016, respectively, is included in research and development in the consolidated statement of operations. Research and development costs that are not eligible for capitalization have been expensed in the period incurred. Goodwill is tested for impairment on an annual basis or when there are indications the carrying amount may be impaired. Goodwill is allocated to the Group’s two operating segments, Premium and Ad-Supported, based on the units 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 2018 2018 2017 2017 (in € millions) Goodwill 128 18 119 16 The detailed calculations of recoverable amounts performed in 2016, which noted substantial headroom, were used in the 2018 impairment test as there have been no adverse significant changes in the industry and competitive environment, market capitalization, stock price and overall financial performance such that the recoverable amounts would be less than the carrying amount in 2018. Therefore, the Group concluded that goodwill was not impaired. |
Restricted cash and other non-c
Restricted cash and other non-current assets | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Restricted Cash And Other Non Current Assets [Abstract] | |
Restricted cash and other non-current assets | 14 . 2018 2017 (in € millions) Restricted cash Lease deposits and guarantees 52 41 Other 3 1 Other non-current assets 10 12 65 54 |
Trade and other receivables
Trade and other receivables | 12 Months Ended |
Dec. 31, 2018 | |
Trade And Other Receivables [Abstract] | |
Trade and other receivables | 15 . 2018 2017 (in € millions) Trade receivables 286 295 Less: allowance for expected credit losses (8 ) (15 ) Less: provision for credit reserves (5 ) (8 ) Trade receivables – net 273 272 Other 127 88 400 360 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. Other includes €18 million for amounts expected to be recovered from rights holders for retroactive statutory rate change for the year ended December 31, 2018. The Group establishes an accrual against advances made to rights holders not expected to be recovered. The aging of the Group’s net trade receivables is as follows: 2018 2017 (in € millions) Current 195 153 Overdue 1 – 30 days 44 69 Overdue 31 – 60 days 19 13 Overdue 60 – 90 days 7 11 Overdue more than 90 days 8 26 273 272 The movements in the Group’s allowance for expected credit losses are as follows: 2018 2017 (in € millions) At January 1 15 18 Provision for expected credit losses 15 12 Receivables written off (18 ) (3 ) Reversal of unutilized provisions (4 ) (12 ) At December 31 8 15 The Group maintains an allowance for expected credit losses of a portion of trade receivables based on the simplified approach for measuring expected credit losses. The Group estimates anticipated losses based on lifetime expected credit losses at each reporting date. The Group has an established provision matrix which takes into account the number of days past due, collection history, identification of specific customer exposure, product type, geographical region and current economic trends. Expected credit losses on trade receivables are calculated based on the aforementioned matrix and are charged to general and administrative expense in the consolidated statement of operations. Receivables for which an impairment provision was recognized are written off against the provision when it is deemed uncollectible. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables mentioned above. The Group does not hold any collateral as security. |
Issued Share Capital and Other
Issued Share Capital and Other Reserves | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Classes Of Share Capital [Abstract] | |
Issued share capital and other reserves | 16 . As at December 31, 2018, 2017, and 2016, the authorized and subscribed share capital was comprised of 403,032,520, 403,001,760, and 403,001,760 shares, respectively, at a par value €0.000625 each. As at December 31, 2018, 2017, and 2016, the Company had 183,901,040, 167,258,400, and 149,924,000 ordinary shares issued and fully paid, respectively. The Group has incentive stock option plans under which options to subscribe to the Company’s share capital have been granted to executives and certain employees. Options exercised under these plans are settled via either the issuance of new shares or issuance of shares from treasury. On November 13, 2012, the Group entered into an equity financing agreement with new and existing shareholders for the issuance of 4,204,120 ordinary shares for total gross proceeds of €79 million and incurred transaction costs of €3 million in addition to the shares received, the new investors also received contingent options that provided downside protection (meaning that the new investors are eligible to receive additional shares at certain valuations in the event of certain triggering events such as a trade sale, public listing, or liquidation). The contingent options were determined to be embedded derivatives which required separation from the equity issuance. The contingent options recognized as a derivative liability upon issuance were valued at €39 million at December 31, 2012. Upon the direct listing, the contingent options expired at no value. On November 20, 2013, the Group entered into an equity financing agreement with new investors for the issuance of 8,233,160 shares. On December 19, 2013, the first closing occurred and the Group issued 5,584,160 shares for total gross proceeds of €123 million and incurred transaction costs of €2 million. The second closing occurred on January 17, 2014, whereby 2,649,000 ordinary shares were issued for total gross proceeds of €58 million. In addition to the shares received in December 2013, the new investors also received contingent options that provided downside protection (meaning that the new investors are eligible to receive additional shares at certain valuations in the event of certain triggering events such as a trade sale, public listing, or liquidation). The contingent options were determined to be embedded derivatives, which required separation from the equity issuance. The contingent options recognized as a derivative liability upon issuance were valued at €31 million at December 31, 2013. Upon the direct listing, the contingent options expired at no value. On April 17, June 9, and July 15, 2015, the Group entered into an equity financing agreement with new and existing shareholders for the issuance of 9,484,880 ordinary shares for total gross proceeds of €479 million and incurred transaction costs of €5 million. In addition to the shares received, the new investors also received contingent options that provided downside protection (meaning that the new investors are eligible to receive additional shares at certain valuations in the event of certain triggering events such as a trade sale, public listing, or liquidation). The contingent options were determined to be embedded derivatives, which required separation from the equity issuance. The contingent options are recognized as a derivative liability and were valued at €87 million upon issuance. Upon the direct listing, the contingent options expired at no value. On October 17, 2016, the Group issued, for €27 million in cash, warrants to acquire 5,120,000 ordinary shares to certain members of key management. The exercise price of each warrant is US$50.61, which was equal to 1.2 times the fair market value of ordinary shares on the date of issuance. The warrants are exercisable at any time through October 17, 2019. On July 13, 2017, the Group issued, for €9 million in cash, a warrant to acquire 1,600,000 ordinary shares to a holder that is an employee and a member of management of the Group. The exercise price of each warrant is US$89.73, which was equal to 1.3 times the fair market value of ordinary shares on the date of issuance. The warrants are exercisable at any time through July 2020. On December 15, 2017, the Group issued 8,552,440 ordinary shares in exchange for a non-controlling equity interest in TME valued at €910 million. For further details, please see Note 22. The ordinary shares issued are subject to certain transfer restrictions for a period of up to three years from December 15, 2017, subject to limited exceptions, including transfers with the Group’s prior consent; transfers to certain permitted transferees; transfers pursuant to a tender offer or exchange offer recommended by the Group’s board of directors for a majority of the Group’s issued and outstanding securities; transfers pursuant to mergers, consolidations, or other business combination transactions approved by the Group’s board of directors; transfers to the Group or any of its subsidiaries; or transfers that are necessary to avoid regulation as an “investment company” under the U.S. Investment Company Act of 1940, as amended. On December 15 and 29, 2017, the Group entered into exchange agreements with holders of a portion of its Convertible Notes, pursuant to which the Group exchanged an aggregate of US$411 million in principal of Convertible Notes, plus accrued interest of US$37 million, for an aggregate of 6,554,960 ordinary shares. In January 2018, the Group entered into an exchange agreement with holders of the remaining balance of its Convertible Notes, pursuant to which the Group exchanged the remaining of $628 million of Convertible Notes, plus accrued interest, for 9,431,960 ordinary shares. On February 16, 2018, the Company issued 10 beneficiary certificates per ordinary share held of record to entities beneficially owned by the Group’s founders, Daniel Ek and Martin Lorentzon. The beneficiary certificates carry no economic rights and are issued to provide the holders of such beneficiary certificates with additional voting rights. The beneficiary certificates, subject to certain exceptions, are non-transferable and shall be automatically canceled for no consideration in the case of sale or transfer of the ordinary share to which they are linked. The Company may issue additional beneficiary certificates under the total authorized amount at the discretion of its Board of Directors, of which the Group’s founders are members. As of December 31, 2018, the Group’s founders held 364,785,640 beneficiary certificates. On March 7, 2018, the Company issued 5,740,000 ordinary shares to our Netherlands subsidiary at par value and subsequently repurchased those shares at the same price. These shares are held in treasury in order to facilitate the fulfillment of employee exercises under the Company’s ESOP and RSU plans. Similar future transactions are expected to take place to fulfill future option exercises. On April 3, 2018, the Group completed a direct listing of the Company’s ordinary shares on the NYSE. Upon the direct listing, the option for the Convertible Noteholders to unwind the January 2018 exchange transaction expired and, as a result, the Company reclassified the Convertible Notes balance of €1.1 billion to Other paid in capital within Equity. On November 5, 2018, the Company announced that it would commence a share repurchase program beginning in the fourth quarter of 2018. Repurchases of up to 10,000,000 of the Company’s ordinary shares have been authorized by the Company’s general meeting of shareholders and the Board of Directors approved such repurchase up to the amount of $1.0 billion. The repurchase program will expire on April 21, 2021. Through December 31, 2018, there have been 687,271 shares repurchased under this program. No dividends were paid during the year or are proposed. All outstanding shares have equal rights to vote at general meetings. For the year end December 31, 2018, the Company repurchased, in total, 6,427,271 of its own ordinary shares and reissued 3,382,312 treasury shares upon the exercise of stock options and restricted stock units. The Company did not repurchase its own ordinary shares nor reissue treasury shares during the years ended December 31, 2017 and 2016. As of December 31, 2018 and 2017, the Company had 3,044,959 and 0 ordinary shares held as treasury shares, respectively. Other reserves 2018 2017 2016 (in € millions) Currency translation At January 1 (7 ) (4 ) 8 Currency translation (6 ) (3 ) (12 ) Gains reclassified to consolidated statement of operations (2 ) At December 31 (15 ) (7 ) (4 ) Short term investments At January 1 (5 ) (4 ) — Losses on fair value that may be subsequently reclassified to consolidated statement of operations (2 ) (2 ) (4 ) Losses reclassified to consolidated statement of operations 2 1 — Deferred tax on unrealized losses 1 — — At December 31 (4 ) (5 ) (4 ) Long term investments At January 1 (11 ) — — Gains on fair value not to be subsequently reclassified to consolidated statement of operations 720 (11 ) — Deferred tax on unrealized gains (148 ) — — At December 31 561 (11 ) — Cash flow hedges At January 1 — — — Gains on fair value that may be subsequently reclassified to consolidated statement of operations 1 — — Gains reclassified to revenue (5 ) — — Losses reclassified to cost of revenue 3 — — At December 31 (1 ) — — Share-based payments At January 1 200 130 77 Share-based payments (Note 17) 88 67 53 Income tax impact associated with share-based payments (Note 10) 48 3 — Restricted stock units withheld for employee taxes (2 ) — — At December 31 334 200 130 Other reserves at December 31 875 177 122 Currency translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign operations into the reporting currency. Short term investment reserve recognizes the unrealized fair value gains and losses on debt instruments held at fair value through OCI. Long term investment reserve recognizes the unrealized fair value gains and losses on equity instruments held at fair value through OCI. Cash flow hedge reserve recognizes the unrealized gains and losses on the effective portion of foreign exchange forward contracts designated for hedging. Share-based payments reserve recognizes the grant date fair value of equity-settled awards provided to employees as part of their remuneration. For further details, please see Note 17. |
Share-based Payments
Share-based Payments | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Share Based Payments [Abstract] | |
Share-based payments | 17 . Employee Share Option Plans Under the Employee Share Option Plans (“ESOP”), share options of the Company are granted to executives and certain employees of the Group. For options granted prior to January 1, 2016, the exercise price is equal to the fair value of the shares on grant date for employees in the United States and for U.S. citizens and fair value less 30% for the rest of the world. The value of the discount is included in the grant date fair value of the award. For options granted thereafter, the exercise price of the options is equal to the fair value of the shares on grant date for all employees. Generally, the first vesting period (13.5% – 25% of the initial grant) is up to one year from the grant date and subsequently vests at a rate of 6.25% each quarter until fully vested. The exercise price for options is payable in the EUR value of a fixed USD amount; therefore, the Group considers these awards to be USD-denominated. The options are generally granted with a term of 5 years. Restricted Stock Awards In connection with the Group’s acquisition of Echo Nest in March of 2014, the Group issued 158,720 restricted stock awards (RSAs) to certain Echo Nest employees. Vesting of the RSAs was contingent on continued employment of these employees. The awards were accounted for as equity-settled share-based payment transactions. The RSAs vested annually over a two-year period from the acquisition date. The valuation of the RSAs was consistent with the fair value of the ordinary shares. In connection with an acquisition during 2017, the Group issued 61,880 restricted stock awards (“RSAs”) to certain employees of the aquiree. Vesting of the RSAs is contingent on continued employment of these employees. The awards are accounted for as equity-settled share-based payment transactions. The RSAs vest over a two- and three-year period from the acquisition date. The valuation of the RSAs was consistent with the fair value of the ordinary shares. During 2018, 2017, and 2016, the Group recorded share-based compensation expense related to RSAs of €1 million, €0 million, and €0 million, respectively. Restricted Stock Unit Program During 2014, the Company implemented restricted stock unit (“RSUs”) program accounted for as equity-settled share-based payment transaction. RSUs are measured based on the fair market value of the underlying stock on the date of grant. The RSUs granted to participants under the Program generally vest over three to five years. The vesting of certain RSUs could accelerate in the event of a change in control event. The valuation of the RSUs was consistent with the fair value of the ordinary shares. During 2018, 2017, and 2016, the Group recorded share-based compensation expense related to restricted stock units of €3 million, €6 million, and €5 million, respectively. Activity in the RSUs and RSAs outstanding and related information is as follows: RSU RSA Number of RSUs Weighted average grant date fair value Number of RSAs Weighted average grant date fair value US$ US$ Outstanding at January 1, 2016 627,480 32.78 79,360 23.90 Granted 176,080 41.85 — — Forfeited (140,000 ) 30.38 — — Released (162,080 ) 32.53 (79,360 ) 23.90 Outstanding at December 31, 2016 501,480 36.73 — — Granted 80,920 59.63 61,880 90.65 Forfeited (85,903 ) 37.43 — — Released (300,560 ) 38.95 — — Outstanding at December 31, 2017 195,937 42.46 61,880 90.65 Granted 14,383 168.24 — — Forfeited (15,991 ) 34.93 — — Released (93,946 ) 40.12 — — Outstanding at December 31, 2018 100,383 63.87 61,880 90.65 Activity in the share options outstanding and related information is as follows: ESOP Number of options Weighted average exercise price US$ Outstanding at January 1, 2016 9,192,120 22.80 Granted 6,020,360 41.90 Forfeited (512,560 ) 36.03 Exercised (3,661,480 ) 10.15 Expired (61,960 ) 20.93 Outstanding at December 31, 2016 10,976,480 36.88 Granted 5,819,520 64.11 Forfeited (659,000 ) 46.34 Exercised (1,422,520 ) 22.23 Expired (67,760 ) 28.49 Outstanding at December 31, 2017 14,646,720 48.73 Granted 3,578,000 142.20 Forfeited (1,220,508 ) 62.82 Exercised (4,736,555 ) 40.97 Expired (24,131 ) 54.98 Outstanding at December 31, 2018 12,243,526 77.63 Exercisable at December 31, 2016 3,765,000 29.98 Exercisable at December 31, 2017 5,822,400 39.62 Exercisable at December 31, 2018 5,162,876 58.25 The weighted-average contractual life for the share options outstanding at December 31, 2018, 2017, and 2016 is 2.9 years, 3.3 years, and 3.4 years, respectively. The weighted-average share price at exercise for options exercised during 2018, 2017, and 2016 was US$152.33, US$57.53, and US$42.05, respectively. The weighted-average fair value of options granted during the year ended at December 31, 2018, 2017, and 2016 was US$39.23 per option, US$18.05 per option, and US$13.10 per option, and, respectively. The share options outstanding December 31, 2018, 2017, and 2016 are comprised of the following: 2018 2017 2016 Range of exercise prices (US$) Number of options Weighted average remaining contractual life (years) Number of options Weighted average remaining contractual life (years) Number of options Weighted average remaining contractual life (years) 1.65 to 45.00 4,753,052 1.8 9,039,248 2.7 10,917,960 3.5 45.01 to 90.00 3,337,414 3.2 4,736,432 4.2 58,520 3.2 90.01 to 135.00 2,695,890 3.9 871,040 4.2 — — 135.01 to 180.00 749,360 4.3 — — — — 180.01 to 189.52 707,810 4.2 — — — — 12,243,526 2.9 14,646,720 3.3 10,976,480 3.4 In determining the fair value of the employee share-based awards, the Group uses the Black-Scholes option-pricing model. The Company does not anticipate paying any cash dividends in the near future and therefore uses an expected dividend yield of zero in the option valuation model. The expected volatility is based on the historical volatility of public companies that are comparable to the Group over the expected term of the award. The risk-free rate is based on U.S. Treasury zero-coupon rates as the exercise price is based on a fixed USD amount. The expected life of the share options is based on historical data and current expectations. The following table lists the inputs to the Black-Scholes option-pricing models used for employee share-based payments for the years ended December 31, 2018, 2017, and 2016: 2018 2017 2016 Expected volatility (%) 32.0 – 34.7 32.0 – 43.5 37.9 – 45.8 Risk-free interest rate (%) 2.4 – 2.9 1.4 – 2.0 0.8 – 1.8 Expected life of share options (years) 2.4 – 4.4 2.4 – 4.4 2.5 – 5.0 Weighted-average share price (US$) 123.13 – 189.52 50.70 – 90.65 41.20 – 44.40 Valuation assumptions are determined at each grant date and, as a result, are likely to change for share-based awards granted in future periods. Changes to the input assumptions could materially affect the estimated fair value of share-based payment awards. The sensitivity analysis below shows the impact of increasing and decreasing expected volatility by 10% as well as the impact of increasing and decreasing the expected life by one year. This analysis was performed on stock options granted in 2018. The following table shows the impact of these changes on stock option expense for the options granted in 2018: 2018 (in € millions) Actual stock option expense 46 Stock option expense increase (decrease) under the following assumption changes Volatility decreased by 10% (11 ) Volatility increase by 10% 11 Expected life decrease by 1 year (7 ) Expected life increase by 1 year 6 The expense recognized in the consolidated statement of operations for employee share-based payments is as follows: 2018 2017 2016 (in € millions) Cost of revenue 3 2 1 Research and development 40 21 16 Sales and marketing 19 15 10 General and administrative 26 27 26 88 65 53 |
Convertible notes and borrowing
Convertible notes and borrowings | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Convertible Notes And Borrowings [Abstract] | |
Convertible notes and borrowings | 18 . Convertible Notes On April 1, 2016, the Group issued US$1,000 million principal amount of Convertible Notes due in 2021. The notes were issued at par and bore interest of 5.0% payment-in-kind interest increasing by 100 basis points every six months after two years. Upon a specified conversion event occurring, the Convertible Notes would convert into ordinary shares at a conversion rate reflecting a conversion price equal to the lesser of a price cap per share or a discount of 20.0% to the per share price of the Company’s ordinary shares. If a specified conversion event did not occur within twelve months, the discount would increase by 250 basis points and then again, every six months thereafter until a specified conversion event did occur. A direct listing was not considered a specified conversion event. The terms also included change of control clauses where the notes holders had the option to convert into ordinary shares. At maturity, if the notes had not yet been converted or repaid, note holders would receive cash in an amount equal to the original principal amount plus 10% annualized return. The transaction costs of approximately US$20 million were effectively immediately expensed in finance costs. The Convertible Note agreements included certain affirmative covenants, including the delivery of audited consolidated financial statements to the holders. On December 15, 2017, holders of a portion of the Group’s Convertible Notes exchanged US$301 million in principal of Convertible Notes, plus accrued interest of US$27 million, for 4,800,000 ordinary shares. The Convertible Notes were recorded at fair value on the date of exchange, which was reclassified to equity upon issuance of the ordinary shares. The fair value at exchange was based on secondary market transactions of US$600 million between note holders and a third party. On December 27, 2017, the Group entered into an exchange agreement with holders of a portion of its Convertible Notes, pursuant to which the Group exchanged an aggregate of US$110 million in principal of Convertible Notes, plus accrued interest of US$10 million, for an aggregate of 1,754,960 ordinary shares as of December 29, 2017. The Convertible Notes were recorded at fair value on the date of exchange, which was reclassified to equity upon issuance of the ordinary shares. The fair value at exchange of US$211 million was based on the ordinary share fair value as at December 31, 2017. In January 2018, the Group entered into an exchange agreement with holders of the remaining balance of its Convertible Notes, pursuant to which the Group exchanged the remaining of $628 million of Convertible Notes, plus accrued interest, for 9,431,960 ordinary shares. Pursuant to this exchange agreement, subject to certain conditions, if the Company failed to list its ordinary shares on or prior to July 2, 2018, the Group had agreed to offer to each noteholder the option to unwind the transaction such that the Group purchases back the shares that were issued to such noteholder pursuant to the exchange and would have issued such noteholder a new note that is materially identical to its note prior to the exchange. The option to unwind the exchange if a listing did not occur by July 2, 2018 met the definition of a contingent settlement event, and resulted in the issued equity shares (“Converted Notes”) being classified as a financial liability in the statement of financial position until the option to unwind expired due to a direct listing or the passage of time. On April 3, 2018, the Group completed a direct listing of the Company’s ordinary shares on the NYSE. Upon the direct listing, the option for the Convertible Noteholders to unwind the January 2018 exchange transaction expired and, as a result, the Group recorded an expense of €123 million within finance costs to mark to market the Convertible Notes to the fair value based on the closing price of the Company’s ordinary shares on April 3, 2018. The Company then reclassified the Convertible Notes balance of €1.1 billion to Other paid in capital within Equity . |
Trade and other payables
Trade and other payables | 12 Months Ended |
Dec. 31, 2018 | |
Trade And Other Payables [Abstract] | |
Trade and other payables | 19 . 2018 2017 (in € millions) Trade payables 295 242 Value added tax and sales taxes payable 118 91 Other current liabilities 14 8 427 341 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, 2018 | |
Disclosure Of Accrued Expenses And Other Liabilities [Abstract] | |
Accrued expenses and other liabilities | 20 . 2018 2017 (in € millions) Non-current Deferred rent 85 55 Other accrued liabilities — 1 85 56 Current Accrued fees to rights holders 832 639 Accrued salaries, vacation, and related taxes 41 34 Accrued social costs for options and RSUs 64 87 Other accrued expenses 139 121 1,076 881 1,161 937 During the year ended December 31, 2018, the Group recorded an accrual for fees to rights holders of €12 million that relates to prior years. |
Provisions
Provisions | 12 Months Ended |
Dec. 31, 2018 | |
Provisions [Abstract] | |
Provisions | 21 . Legal contingencies Other Total (in € millions) Carrying amount at January 1, 2017 49 12 61 Charged/(credited) to the consolidated statement of operations: Additional provisions 60 7 67 Reversal of unutilized amounts — (1 ) (1 ) Exchange differences (11 ) — (11 ) Utilized (45 ) (6 ) (51 ) Carrying amount at December 31, 2017 53 12 65 Charged/(credited) to the consolidated statement of operations: Additional provisions — 7 7 Exchange differences 3 — 3 Utilized (17 ) (8 ) (25 ) Carrying amount at December 31, 2018 39 11 50 As at December 31, 2017: Current portion 53 6 59 Non-current portion — 6 6 As at December 31, 2018: Current portion 39 3 42 Non-current portion — 8 8 Various legal actions, proceedings, and claims are pending or may be instituted or asserted against the Group. The results of such legal proceedings are difficult to predict and the extent of the Group’s financial exposure is difficult to estimate. The Group records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Between December 2015 and January 2016, two putative class action lawsuits were filed against Spotify USA Inc. in the U.S. District Court for the Central District of California, alleging that the Group unlawfully reproduced and distributed musical compositions without obtaining licenses. These cases were subsequently consolidated in May 2016 and transferred to the U.S. District Court for the Southern District of New York in October 2016, as Ferrick et al. v. Spotify USA Inc . The court’s order granting approval of the settlement was appealed by objectors to the U.S. Court of Appeals for the Second Circuit. As of January 15, 2019, hose appeals have all been resolved. Th Even if the approval of the settlement is upheld on appeal, the Group 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. Other Other provisions include onerous contracts. At December 31, 2017, onerous contracts principally represented vacant leasehold property, which the Group has substantially ceased to use and the Group estimates a sub-tenant would lease at a significantly reduced rental. In this case, the unavoidable costs of meeting the obligations under the lease exceed the economic benefits expected to be received. As such, the Group recorded a provision for the estimated cash flows related to the property within operating expenses. This provision was settled with the landlord in September 2018. The Group has obligations under lease agreements to return the leased assets to their original condition. An obligation to return the leased asset to their original condition upon expiration of the lease is accounted for as asset retirement obligations. The obligations are expected to be settled at the end of the lease terms. Indirect tax provisions relate primarily to potential non-income tax obligations in various jurisdictions. The Group recognizes provisions for claims or indirect taxes when it determines that an unfavorable outcome is probable and the amount of loss can be reasonably estimated. These provisions are recognized as general and administrative expenses. |
Financial Risk Management and F
Financial Risk Management and Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Financial Instruments [Abstract] | |
Financial risk management and financial instruments | 22 . Financial risk management The Group’s operations are exposed to financing and financial risks, which are managed under the control and supervision of the Board of Directors of the Company. To manage these risks efficiently, the Group has established guidelines in the form of a treasury policy that serves as a framework for the daily financial operations. The treasury policy stipulates the rules and limitations for the management of financial risks. Financial risk management is centralized within Treasury who are responsible for the management of financing and financial risks. Treasury manages and executes the financial management activities, including monitoring the exposure of financial risks, cash management, and maintaining a liquidity reserve, and it provides certain financial services to the Group’s entities. Treasury operates within the limits and policies authorized by the Board of Directors. Capital management The Group’s objectives when managing capital (cash and cash equivalents, short term investments, equity, and, until April 2018, Convertible Notes) is to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Group’s capital structure and dividend policy is decided by the Board of Directors. Treasury continuously reviews the Group’s capital structure considering, amongst other things, market conditions, financial flexibility, business risk, and growth rate. On November 5, 2018, Spotify Technology S.A. announced that it would commence a share repurchase program beginning in the fourth quarter of 2018. Repurchases of up to 10,000,000 of the Company’s ordinary shares have been authorized by the Company’s general meeting of shareholders and the Board of Directors approved such repurchase up to the amount of $1.0 billion. The repurchase program will expire on April 21, 2021. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. The repurchase program will be executed consistent with our capital allocation strategy of prioritizing investment to grow the business over the long term. Under the repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases, all in compliance with the rules of the Commission and other applicable legal requirements. The repurchase program does not obligate the Company to acquire any particular amount of ordinary shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. We plan to use current cash and cash equivalents and the cash flow we generate from our operations to fund our share repurchase program. The Group is not subject to any externally imposed capital requirements. Credit risk management Financial assets carry an element of risk that counterparties may be unable to fulfill their obligations. This exposure arises from the investments in liquid funds of banks and other counterparties. The Group mitigates this risk by adopting a risk adverse approach in relation to the investment of surplus cash. The main objectives for investments are first, to preserve principal and secondarily, to maximize return given the rules and limitations of the treasury policy. Surplus cash is invested in counterparties and instruments considered to carry low credit risk. Investments are subject to credit rating thresholds and at the time of investment, no more than 10% of surplus cash can be invested in any one issuer (excluding certain government bonds and investments in cash management banks). The weighted-average maturity of the portfolio shall not be greater than 2 years, and the final maturity of any investment is not to exceed 5 years. The Group shall maintain the ability to liquidate the majority of all short term investments within 90 days. At December 31, 2018 and 2017, the financial credit risk was equal to the consolidated statement of financial position value of cash and cash equivalents and short term investments of €1,806 million and €1,509 million, respectively. No credit losses were incurred during 2018 or 2017 on the short term investments. The credit risk with respect to the Group’s trade receivables is diversified geographically and among a large number of customers, private individuals, as well as companies in various industries, both public and private. The majority of the Group’s revenue is paid monthly in advance significantly lowering the credit risk incurred for these specific counterparties. Solvency information is generally required for credit sales within the Ad sales and Partner subscription business to minimize the risk of bad debt losses and is based on information provided by credit and business information from external sources. Liquidity risk management Liquidity risk is the Group’s risk of not being able to meet the short term payment obligations due to insufficient funds. The Group has internal control processes and contingency plans for managing liquidity risk. A centralized cash pooling process enables the Group to manage liquidity surpluses and deficits according to the actual needs at the group and subsidiary level. The liquidity management takes into account the maturities of financial assets and financial liabilities and estimates of cash flows from operations. The Group’s policy is to have a strong liquidity position in terms of available cash and cash equivalents, and short term investments. 2018 2017 (in € millions) Liquidity Short term investments 915 1,032 Short term deposits 307 122 Cash at bank and on hand 584 355 Total surplus liquidity 1,806 1,509 Liquidity position 1,806 1,509 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 transaction exposure on a case-by-case basis. During 2016, the Group had not entered into any hedging transactions. In 2017, the Group began entering into multiple foreign exchange forward contracts. The Group strived, as far as possible, to mitigate its currency exposure in the USD denominated Convertible Notes by matching the balance with USD denominated cash and cash equivalents and short term investments creating a natural hedge. Translation exposure relates to net investments in foreign operations. The Group does not conduct translation risk hedging. (i) Transaction exposure sensitivity In most cases, the Group’s customers are billed in their respective local currency. Major payments, such as salaries, consultancy fees, and rental fees are settled in local currencies. Royalty payments are primarily in EUR and USD. Hence, the operational need to net purchase foreign currency is due primarily to a deficit from such settlements. The table below shows the immediate impact on net loss before tax of a 10% strengthening in the closing exchange rate of significant currencies to which the Group had exposure, at December 31, 2018 and 2017. The impact on net loss is due primarily to monetary assets and liabilities in a transactional currency other than the functional currency of a subsidiary within the Group. The sensitivity associated with a 10% weakening of a particular currency would be equal and opposite. This assumes that each currency moves in isolation. 2018 AUD EUR GBP USD (in € millions) (Increase)/decrease in loss before tax 7 (3 ) 3 74 2017 AUD EUR GBP USD (in € millions) (Increase)/decrease in loss before tax 5 2 (2 ) 9 For the notional amount of the Group’s foreign exchange forward contracts not designated for hedging, the immediate impact on net loss before tax of a 10% strengthening in the closing exchange rate of the USD would be a negative impact of €26 million as of December 31, 2017. The Group had no such instruments outstanding as of December 31, 2018. (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 €12 million and €27 million if the EUR weakened by 10% against all translation exposure currencies, based on the exposure at December 31, 2018 and 2017, 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 fair value of the Group’s Convertible Notes was dependent on market interest rates, which might have negatively impacted earnings. The Convertible Notes were re-measured at each reporting date using valuation models using input data, which included market interest rates. Changes in the fair value of the Convertible Notes were recognized in finance income or cost in the consolidated statement of operations. An increase in market interest rates would have decreased the value of the Convertible Notes. The Group did not enter into any hedging arrangement to mitigate these fluctuations. The Group’s exposure to interest rate risk also is related to its interest-bearing assets, primarily its debt securities held at fair value through other comprehensive income. Fluctuations in interest rates impact the yield of the investment. The sensitivity analysis considered the historical volatility of short term interest rates and determined that it was reasonably possible that a change of 100 basis points could be experienced in the near term. A hypothetical 100 basis points increase in interest rates would have impacted interest income by €8 million for both years ended December 31, 2018 and 2017. Financing risk management The Group finances its operations through external borrowings, equity, and cash flow from operations. The funding strategy has been to diversify funding sources. Historically, the external debt consisted of the Convertible Notes and finance leases. Share price risk management Share price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in the fair value of the Company’s ordinary share price. The Group’s exposure to this risk relates primarily to the outstanding warrants and social costs accrual. At December 31, 2017, the Convertible Notes were valued at the assumed exchange to ordinary shares based on the fair value of the Company’s ordinary share price. An increase in share price would have increased the value of the Convertible Notes. The warrants are re-measured at each reporting date using valuation models using input data based on the Company’s share price. Changes in the fair value of these instruments are recognized in finance income or cost. An increase of share price will increase the value of the warrants. The Group has not entered into any hedging arrangement to mitigate these fluctuations. Other share price risk Social costs are payroll taxes associated with employee salaries and benefits, including share-based compensation that we are subject to in various countries in which we operate. 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 €11 million and €16 million at December 31, 2018 and December 31, 2017, respectively. Investment risk We are exposed to investment risk as it relates to changes in the market value of our long term investments, due primarily to volatility in the share price used to measure the investment and exchange rates. The majority of our long term investments relate to TME. Management of insurable risks 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 designated certain foreign exchange forward contracts as cash flow hedges when all the requirements of IFRS 9 Financial Instruments Notional amount in foreign currency Australian dollar (AUD) British pound (GBP) Swedish krona (SEK) U.S. dollar (USD) (in millions) Hedged line item in consolidated statement of operations Revenue 187 282 1,112 27 Cost of revenue 143 202 757 21 Total 330 484 1,869 48 The Group recognizes the foreign exchange contracts from hedging activities as either assets or liabilities on the consolidated statement of financial position and measures them at fair value. The Group reflects the gain or loss on the effective portion of a cash flow hedge as a component of other reserves and subsequently reclassifies cumulative gains and losses to revenue or cost of revenue, depending on the risk hedged, when the hedged transactions are recorded. If the hedged transactions become probable of not occurring, the corresponding amounts in other reserve would be immediately reclassified to finance costs. The Group evaluates hedge effectiveness at the inception of the hedge prospectively and records any ineffective portion of the hedge in finance costs in the consolidated statement of operations. 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. Non designated hedges Derivative instruments including foreign exchange forward contracts that do not meet the requirements in IFRS 9 Financial Instruments Fair values On January 1, 2018, the Group adopted IFRS 9, Financial Instruments 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. All other financial assets and liabilities are accounted for at fair value. The following tables summarize, by major security type, our 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 2018 (in € millions) Financial assets at fair value Short term investments: Government securities 164 57 — 221 Agency securities — 7 — 7 Corporate notes — 343 — 343 Collateralized reverse purchase agreements — 344 — 344 Derivatives (not designated for hedging): Other — — 2 2 Derivatives (designated for hedging): Foreign exchange forwards — 6 — 6 Long term investments 1,630 — 16 1,646 Total financial assets at fair value by level 1,794 757 18 2,569 Financial liabilities at fair value Derivatives (not designated for hedging): Warrants — — 333 333 Derivatives (designated for hedging): Foreign exchange forwards — 6 — 6 Total financial liabilities at fair value by level — 6 333 339 Financial assets and liabilities by fair value hierarchy level Level 1 Level 2 Level 3 2017 (in € millions) Financial assets at fair value Short term investments: Government securities 206 38 — 244 Agency securities — 7 — 7 Corporate notes — 330 — 330 Collateralized reverse purchase agreements — 451 — 451 Derivatives (not designated for hedging): Foreign exchange forwards — 2 — 2 Derivatives (designated for hedging): Foreign exchange forwards — 6 — 6 Long term investment — — 910 910 Total financial assets at fair value by level 206 834 910 1,950 Financial liabilities at fair value Convertible Notes — — 944 944 Derivatives (not designated for hedging): Contingent options — — 3 3 Warrants — — 346 346 Derivatives (designated for hedging): Foreign exchange forwards — 5 — 5 Total financial liabilities at fair value by level — 5 1,293 1,298 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, 2018 and 2017 there were no transfers between levels in the fair value hierarchy other than the Group’s long term investment in TME, as previously noted. Recurring fair value measurements The following sections describe the valuation methodologies the Group uses to measure the Level 3 financial instruments at fair value on a recurring basis. Long term investments Long term investments consist of non-controlling equity interests in public and private companies, primarily the Group’s approximate 9% investment in TME. These investments are carried at fair value through other comprehensive income. Prior to December 12, 2018, the fair value of unquoted ordinary shares of TME had been estimated using unquoted TME market transactions, the latest fair value per ordinary share disclosed within TME’s initial registration statement on Form F-1 filed with the SEC and other unobservable inputs. Subsequent to December 12, 2018, the fair value of ordinary shares of TME is based on the ending NYSE American depository share price. Accordingly, the entire balance of the Group’s investment in TME of €1,630 million was transferred from level 3 to level 1 within the fair value hierarchy in accordance with IFRS 7. During the year ended December 31, 2018, the Group recognized €720 million in mark to market The table below presents the changes in the long term investments: 2018 2017 (in € millions) At January 1 910 — Equity issued in exchange for long term investment — 910 Changes in fair value recorded in other comprehensive loss 720 — Purchase of investment 16 — At December 31 1,646 910 The impact on the fair value of the Group’s long term investment in TME using reasonably possible alternative assumptions with an increase or a decrease of TME’s share price used to value our equity interests of 10% results in a range of €1,467 million to €1,793 million at December 31, 2018 and €819 million to €1,001 million at December 31, 2017. Fair value of ordinary shares On April 3, 2018, the Group completed a direct listing of the Company’s ordinary shares on the NYSE. The fair value of the Company’s ordinary shares subsequent to our direct listing is based on the NYSE closing ordinary share price of the Group. The valuation of certain items in the consolidated financial statements prior to the direct listing was consistent with the Group’s use of the Probability Weighted Expected Return Method (“PWERM”) to value the Company’s ordinary shares. The fair value of the ordinary shares prior to the direct listing was determined using recent secondary market transactions in the Company’s ordinary shares and the PWERM, which is one of the recommended valuation methods to measure fair value in privately held companies with complex equity structures in the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation The following weightings, up until the Group’s direct listing, were applied to each valuation method: 2018 2017 2016 PWERM 50% 50 – 80% 80 – 100% Secondary market transactions 50% 20 – 50% 0 – 20% The PWERM valuations, up until the Group’s direct listing, weighted the different scenarios as follows: 2018 2017 2016 Market Approach – High Case Public Company 55 – 70% 25 – 40% 20 – 25% Market Approach – Low Case Public Company 28 – 35% 35% 35 – 40% Market Approach – High Case Transaction 0 – 3% 4 – 6% 4% Market Approach – Low Case Transaction 0 – 2% 4 – 6% 6% Private Case – Income and Market Approaches 2 – 5% 5 – 30% 30% The key assumptions used to estimate the fair value of the ordinary shares and contingent options using the PWERM, up until the Group’s direct listing, were as follows: 2018 2017 2016 Revenue multiple used to estimate enterprise value 3.0 2.2 – 4.6 2.0 – 3.5 Discount rate (%) 13.0 13.0 – 19.5 14.0 – 19.5 Volatility (%) 32.5 – 35.0 30.0 – 37.5 35.0 – 47.5 Contingent options The Group’s derivatives included contingent options that provided investors associated with the equity financings with downside protection. The contingent options were measured on a recurring basis in the consolidated statement of financial position and were Level 3 financial instruments recognized at fair value through the consolidated statement of operations. The contingent options were valued using the models that included the value of the Company’s ordinary shares, including the assumptions for probability scenarios and PWERM as determined above. The key assumptions used to estimate the fair value of the options using the PWERM were consistent with those noted above. Under each scenario, the Group computed the difference between a) the value of the new shares, valued with the embedded contingent options and b) the ordinary shares, valued without the embedded contingent options (“Ordinary Shares”) to derive an indication of the value of the contingent options for each scenario. The differential between new shares and the Ordinary Shares was discounted, where appropriate, to present value to arrive at an indication of the value of the contingent options for each scenario at the valuation date. Finally, the indicated values under each scenario were weighted based on the weightings noted above to determine the indicated value of the contingent options. Upon the direct listing, on April 3,2018, the Group reduced the fair value to €0 million to reflect the expiration of the contingent put options. The impact on the fair value of the contingent options of using reasonably possible alternative assumptions with an increase or a decrease in share price of 10% resulted in a range of €2 million to €4 million at December 31, 2017. The table below presents the changes in the contingent options liability as at December 31: 2018 2017 2016 (in € millions) At January 1 3 100 82 (Gain)/loss recognized in profit or loss (3 ) (97 ) 18 At December 31 — 3 100 The contingent options were included in derivative liabilities on the consolidated statement of financial position. The change in estimated fair value was recognized within finance income or costs in the consolidated statement of operations. Warrants On October 17, 2016, the Company sold, for €27 million, warrants to acquire 5,120,000 ordinary shares to certain holders that are employees and management of the Group. The exercise price of each warrant is US$50.61, which was equal to 1.2 times the fair market value of ordinary shares on the date of issuance. The warrants are exercisable at any time through October 17, 2019. On July 13, 2017, the Company sold, for €9 million, a warrant to acquire 1,600,000 ordinary shares to certain holders that are employees and management of the Group. The exercise price of each warrant is US$89.73, which was equal to 1.3 times the fair market value of ordinary shares on date of issuance. The warrants are exercisable at any time through July 2020. The warrants are measured on a recurring basis in the consolidated statement of financial position and are Level 3 financial instruments recognized at fair value through the consolidated statement of operations. The warrants are valued using a Black-Scholes option-pricing model, which includes inputs determined from models that include the value of the Company’s ordinary shares, as determined above and additional assumptions used to estimate the fair value of the warrants in the option pricing model as follows: 2018 2017 2016 Expected term (years) 0.6 – 1.7 0.9 – 1.6 1.9 – 2.1 Risk free rate (%) 1.98 – 2.73 1.17 – 1.76 0.77 – 1.14 Volatility (%) 32.5 – 40.0 30.0 – 37.5 35.0 – 37.5 Share price (US$) 113.50 – 180.83 50.70 – 120.50 42.18 – 44.40 The table below presents the changes in the warrants liability: 2018 2017 2016 (in € millions) At January 1 346 34 — Issuance of warrant for cash — 9 27 Non cash changes in profit or loss Changes in fair value (39 ) 313 7 Effect of changes in foreign exchange rates 26 (10 ) — At December 31 333 346 34 The warrant liability is included in derivative liabilities on the consolidated statement of financial position. The change in estimated fair value is recognized within finance income or costs in the consolidated statement of operations. The impact on the fair value of the warrants with an increase or decrease in the Company’s ordinary share price of 10% results in a range of €273 million to €399 million at December 31, 2018 and €275 million to €403 million at December 31, 2017. Convertible Notes At December 31, 2017, the Convertible Notes were valued at the assumed exchange to ordinary shares based on the fair value of the Company’s ordinary share price. On April 3, 2018, the Group completed a direct listing of the Company’s ordinary shares on the NYSE, and the option for the Convertible Noteholders to unwind the January 2018 exchange transaction expired. As a result, the Group recorded an expense of €123 million within finance costs to mark to market the Convertible Notes to the fair value based on the closing price of the The table below presents the changes in the Convertible Notes: 2018 2017 2016 (in € millions) At January 1 944 1,106 — Loan financing transaction - Convertible Notes — — 861 Non cash changes recognized in profit or loss Changes in fair value 221 666 166 Effect of changes in foreign exchange rates (20 ) (142 ) 79 Issuance of shares upon exchange of Convertible Notes (1,145 ) (686 ) — At December 31 — 944 1,106 The change in estimated fair value is recognized within finance costs in the consolidated statement of operations. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies [Abstract] | |
Commitments and contingencies | 23 . Obligations under leases The Group leases certain properties under non-cancellable operating lease agreements. The lease terms are between one and sixteen years, and the majority of the lease agreements are renewable at the end of the lease period. The future minimum lease payments under non-cancellable operating leases as at December 31 are as follows: 2018 2017 2016 (in € millions) Not later than one year 62 47 25 Later than one year but not more than 5 years 288 244 97 More than 5 years 483 478 90 833 769 212 Total lease expenses were €79 million, €52 million, and €19 million for the years ended December 31, 2018, 2017, and 2016, respectively. Commitments The Group is subject to the following minimum royalty payments associated with its license agreements as at December 31. 2018 2017 2016 (in € millions) Not later than one year 548 1,060 26 Later than one year but not more than 5 years 152 635 14 700 1,695 40 In addition to the minimum guarantees listed above, we are also subject to a service agreement with Google for the use of Google Cloud Platform with minimum spend commitments of €270 million over the next 2 years. Contingencies Various legal actions, proceedings, and claims are pending or may be instituted or asserted against the Group. These may include, but are not limited to, matters arising out of alleged infringement of intellectual property; alleged violations of consumer regulations; employment-related matters; and disputes arising out of supplier and other contractual relationships. As a general matter, the music and other content made available on the Group’s service are licensed to the Group by various third parties. Many of these licenses allow rights holders to audit the Group’s royalty payments, and any such audit could result in disputes over whether the Group has paid the proper royalties. If such a dispute were to occur, the Group could be required to pay additional royalties, and the amounts involved could be material. The Group expenses legal fees as incurred. The Group records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Group’s operations or its financial position, liquidity, or results of operations. Since July 2017, six lawsuits alleging unlawful reproduction and distribution of musical compositions have been filed against the Group in (i) the U.S. District Court for the Middle District of Tennessee (Bluewater Music Services Corporation v. Spotify USA Inc. Gaudio et al. v. Spotify USA Inc. Robertson et al. v. Spotify USA Inc. A4V Digital, Inc. et al. v. Spotify USA Inc. U.S. District Court for the Southern District of Florida (Watson Music Group, LLC v. Spotify USA Inc. U.S. District Court for the Central District of California (Wixen Music Publishing Inc. v. Spotify USA, Inc. The Wixen v. Spotify lawsuit was voluntarily dismissed on December 20, 2018 after the parties reached a mutual settlement. We expect the W atson v. Spotify Ferrick The Group intends to vigorously defend the remaining claims. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related party transactions | 24 . Key management compensation Key management includes members of the Company’s executive committee 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. 2018 2017 2016 (in € millions) Key management compensation Short term employee benefits 4 4 4 Share-based payments 19 17 18 Post-employment benefits — — 1 Termination benefits 1 1 1 24 22 24 As noted in Note 16, the Company issued warrants to acquire ordinary shares to certain members of key management of the Group. On April 1, 2016, the Group issued and sold the Convertible Notes to, among others, Rivers Cross Trust, an entity wholly owned by Mr. McCarthy, the Group’s Chief Financial Officer. The original principal amount purchased by Rivers Cross Trust was approximately US$0.2 million. In January 2018, the Convertible Notes, plus accrued interest, were exchanged for ordinary shares. Refer to Note 18. The Group recognized partner revenues from its associate in Soundtrack Your Brand Sweden AB of €3 million, €3 million, and €2 million during years ended December 31, 2018, 2017, and 2016, respectively. |
Group information
Group information | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Significant Investments In Subsidiaries [Abstract] | |
Group information | 25 . The Company’s principal subsidiaries as at December 31, 2018 are as follows: Name Principal activities Proportion of voting rights and shares held (directly or indirectly) Country of incorporation Spotify AB Main operating company 100 % Sweden Spotify USA Inc. USA operating company 100 % USA Spotify Ltd Sales, marketing, contract research and development, and customer support 100 % UK Spotify Norway AS Sales and marketing 100 % Norway Spotify Spain S.L. Sales and marketing 100 % Spain Spotify GmbH Sales and marketing 100 % Germany Spotify France SAS Sales and marketing 100 % France Spotify Netherlands B.V. Sales and marketing 100 % Netherlands Spotify Canada Inc. Sales and marketing 100 % Canada Spotify Australia Pty Ltd Sales and marketing 100 % Australia Spotify Brasil Serviços De Música LTDA Sales and marketing 100 % Brazil Spotify Japan K.K Sales and marketing 100 % Japan Spotify Singapore Pte Ltd. Marketing 100 % Singapore There are no restrictions on the net assets of the Group companies. |
Events after the reporting peri
Events after the reporting period | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Events After Reporting Period [Abstract] | |
Events after the reporting period | 26 . Subsequent to the end of the reporting period, the Group repurchased 548,121 ordinary shares for €62 million under the share repurchase program. Subsequent to year-end, the Group entered into agreements to acquire Gimlet Media Inc. and Anchor FM Inc. for purchase consideration totaling approximately €300 million, primarily in cash, subject to closing adjustments. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Summary Of Significant Accounting Policies [Abstract] | |
Basis of preparation | (a) The consolidated financial statements of Spotify Technology S.A. comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and have been prepared on a historical cost basis, except for securities, long term investments, convertible senior notes (“Convertible Notes”), and derivative financial instruments, which have been measured at fair value. The preparation of the consolidated financial statements in conformity with IFRS requires the application of certain critical accounting estimates and assumptions. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas involving a greater degree of judgment or complexity, or areas in which assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 3. The consolidated financial statements provide comparative information in respect of the previous periods. |
Basis of consolidation | (b) Basis of consolidation Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. |
Investment in associates | (c) An associate is an entity over which the Group has significant influence but not control or joint control. The Group accounts for its investments in associates using the equity method whereby the investment is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Group’s share of net assets of the associates since the acquisition date. The Group determines, at each reporting date, whether there is objective evidence that the investment in its associated companies is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount and the carrying amount of the investment. Any gain or loss resulting from the dilution of the Group’s interest in associates where significant influence is retained is recognized in the consolidated statement of operations in “Share in earnings of associate.” |
Foreign currency translation | (d) Functional and reporting currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Euro, which is the Group’s reporting currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in the consolidated statement of operations within finance income or finance costs. Group companies The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into Euro as follows: • Assets and liabilities are translated at the closing rate at the reporting date; • Income and expenses for each statement of operation are translated at average exchange rates; and • All resulting exchange differences are recognized in other comprehensive income/(loss). Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the operation and translated at the closing rate at each reporting date. |
Revenue recognition | (e) Premium revenue The Group generates subscription revenue from the sale of the Premium Service in which customers can listen on-demand and offline. Premium Services are sold directly to end users and through partners who are generally telecommunications companies that bundle the subscription with their own services or collect payment for the stand-alone subscriptions from their end customers. The Group satisfies its performance obligation, and revenue from these services is recognized, on a straight-line basis over the subscription period. Typically, Premium Services are paid for monthly in advance. Premium partner subscription revenue is based on a per-subscriber rate in a negotiated partner agreement and may include minimum guarantees for the number of subscriptions that will be purchased from the Group. 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. When a minimum guarantee is within an agreement and the partner is not expected to meet the commitment, management has concluded the revenue is constrained to the revenue amounts for the actual subscriptions sold in a given period. The Group therefore only recognizes the associated revenue when it is highly probable that this will not result in a significant reversal of revenue when the uncertainty is resolved. The Group assesses the facts and circumstances, including whether the partner is acting as a principal or agent, of all partner revenue arrangements and then recognizes revenues either gross or net. Premium partner services, whether recognized gross or net, have one material performance obligation, that being the delivery of the Premium Service. Additionally, the Group bundles the Premium Service with third-party services and products. Revenue is allocated to each performance obligation based on a standalone selling price for bundled arrangements with multiple performance obligations. Ad-Supported revenue The Group’s advertising revenue is primarily generated through display, audio, and video advertising delivered through advertising impressions. The Group enters into arrangements with advertising agencies that purchase advertising on its platform on behalf of the agencies’ clients. These advertising arrangements are typically sold on a cost-per-thousand basis and are evidenced by an Insertion Order (“IO”) that specifies the terms of the arrangement such as the type of ad product, pricing, insertion dates, and number of impressions in a stated period. Revenue is recognized over time based on the number of impressions delivered. The Group also may offer cash rebates to advertising agencies based on the volume of advertising inventory purchased. These rebates are estimated based on expected performance and historical data and result in a reduction of revenue recognized. Additionally, the Group generates revenue through arrangements with certain suppliers to distribute advertising inventory on their ad exchange platforms for purchase on a cost-per-thousand basis. Revenue is recognized over time when impressions are delivered on the platform. |
Advertising credits | (f) Advertising credits that are not transferable are issued to certain rights holders and allow them to include advertisement on the Ad-Supported Service that promote their artists and the Spotify service, such as the availability of a new single or album on Spotify. These are issued in conjunction with the Group’s royalty arrangements for nil consideration. There is no revenue recognized as the advertising credits are mutually beneficial to both the rights holders and the Group and do not meet the definition of a revenue contract under IFRS 15, Revenue from Contracts with Customers. |
Business combinations | (g) 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. 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 | (h) Cost of revenue consists predominately of royalty and distribution costs related to content streaming. The Group incurs royalty costs paid to certain music record labels, music publishers, and other rights holders for the right to stream music to the Group’s users. Royalties are typically calculated using negotiated rates in accordance with license agreements and are based on either subscription and advertising revenue earned, user/usage measures, or a combination of these. The determination of the amount of the rights holders’ liability is complex and subject to a number of variables, including the revenue recognized, the type of content streamed and the country in which it is streamed, the service tier such content is streamed on, identification of the appropriate license holder, size of user base, ratio of Ad-Supported Users to Premium Subscribers, and any applicable advertising fees and discounts, among other variables. Some rights holders have allowed the use of their content on the platform while negotiations of the terms and conditions are ongoing. In such situations, royalties are calculated using estimated rates. In certain jurisdictions, rights holders have several years to claim royalties for musical compositions and therefore estimates of the royalties payable are made until payments are made. The Group has certain arrangements whereby royalty costs are paid in advance or are subject to minimum guaranteed amounts. An accrual is established when actual royalty costs to be incurred during a contractual period are expected to fall short of the minimum guaranteed amounts. For minimum guarantee arrangements, for which the Group cannot reliably predict the underlying expense, the Group will expense the minimum guarantee on a straight-line basis over the term of the arrangement. The Group also has certain royalty arrangements where the Group would have to make additional payments if the royalty rates were below those paid to other similar licensors (most favored nation clauses). For rights holders with this clause, a comparison is done of royalties incurred to date plus estimated royalties payable for the remainder of the period to estimates of the royalties payables to other appropriate rights holders, and the shortfall, if any, is recognized on a straight-line basis over the period of the applicable most favored nation clause. An accrual and expense is recognized when it is probable that the Group will make additional royalty payments under these terms. The expense related to these accruals is recognized in cost of revenue. Cost of revenue also includes credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs, as well as amounts incurred to produce content for the service. |
Research and development expenses | (i) Research and development expenses are primarily comprised of costs incurred for development of products related to the Group’s platform and service, as well as new advertising products and improvements to the Group’s mobile app, desktop, and streaming services. The costs incurred include related employee compensation and benefits, facility costs, IT costs and consulting costs. |
Sales and marketing expenses | (j) Sales and marketing expenses are primarily comprised of employee compensation and benefits, live events and trade shows, public relations, branding, consulting expenses, customer acquisition costs, advertising, the cost of working with record labels and artists to promote the availability of new releases on the Group’s platform, and the costs of providing free trials of the Premium Service. Expenses included in the costs of providing free trials are primarily derived from per user royalty fees determined in accordance with the rights holder agreements. |
General and administrative expenses | (k) General and administrative expenses are comprised primarily of employee compensation and benefits for functions such as finance, accounting, analytics, legal, human resources, consulting fees, and other costs including facility and equipment costs. |
Income tax | (l) The tax expense for the period comprises current and deferred tax. Tax is recognized in the consolidated statement of operations except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income. (i) Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. (ii) Deferred tax Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for: • Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; • Temporary differences related to investments in subsidiaries, and associates to the extent that the Group is able to control the timing of the reversal of the temporary differences, and it is probable that they will not reverse in the foreseeable future; and • Taxable temporary differences arising on the initial recognition of goodwill. Deferred tax assets are recognized for unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available, against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if certain criteria are met. (iii) Uncertain tax positions In determining the amount of current and deferred income tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes, interest or penalties may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Group to change its judgment regarding the adequacy of existing tax liabilities. Such changes to tax liabilities will impact tax expense in the period that such a determination is made. |
Property and equipment | (m) Property and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes any expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the Group. The Group adds to the carrying amount of an item of property and equipment the cost of replacing parts of such an item if the replacement part is expected to provide incremental future benefits to the Group. All repairs and maintenance are charged to the consolidated statement of operations during the period in which they are incurred. After assets are placed into service, depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method as follows: • Property and equipment: 3 to 5 years • Leasehold improvements: shorter of the lease term or useful life The assets’ residual values, useful lives, and depreciation methods are reviewed annually and adjusted prospectively if there is an indication of a significant change. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the consolidated statement of operations when the asset is derecognized. |
Intangible assets | (n) Acquired intangible assets other than goodwill comprise acquired developed technology 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 2 to 5 years and are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization of intangible assets is recognized in the consolidated statement of operations in the expense category consistent with the function of the intangible assets. |
Goodwill | (o) Goodwill is the excess of the consideration transferred over the net identifiable assets acquired and liabilities assumed. Goodwill is tested annually for impairment, or more regularly if certain indicators are present. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the operating segments that are expected to benefit from the synergies of the combination and represent the lowest level at which the goodwill is monitored for internal management purposes. Goodwill is evaluated for impairment by comparing the recoverable amount of the Group’s operating segments to the carrying amount of the operating segments to which the goodwill relates. If the recoverable amount is less than the carrying amount an impairment charge is determined. The recoverable amount of the operating segments is based on fair value less costs of disposal. The Group believes reasonable estimates and judgments have been used in assessing the recoverable amounts. |
Impairment of non-financial assets | (p) Assets that are subject to depreciation or amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognized in the consolidated statement of operations consistent with the function of the assets, for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows. Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal each reporting period. |
Financial instruments | (q) (i) Financial assets Initial recognition and measurement The Group’s financial assets are comprised of cash and cash equivalents, short term investments, trade and other receivables, derivative assets, long term investments, restricted cash, and other non-current assets. All financial assets are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. Purchases and sales of financial assets are recognized on the settlement date; the date that the Group receives or delivers the asset. The Group classifies its financial assets primarily as cash and cash equivalents, receivables and short term investments, which are primarily debt instruments at fair value through other comprehensive income. 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 15. Short term investments are primarily comprised of debt instruments carried at fair value through other comprehensive income. The securities in this category are those that are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions (therefore not recognized at amortized cost). These meet both the hold to collect and sell business model and solely payments of principal and interest contractual cash flows tests under IFRS 9 Financial Instruments Long term investments are primarily comprised of equity instruments carried at fair value through other comprehensive income based on the irrevocable election made at initial recognition under IFRS 9. The securities within this category are intended to be held for an indefinite period of time and for strategic investment purposes. These are neither held for trading nor contingent consideration recognised by an acquirer in a business combination. These are classified as non-current assets. Subsequent measurement After initial measurement, short term investments are measured at fair value with unrealized gains or losses recognized in other comprehensive income and credited in other reserves within equity until the investment is derecognized, at which time, the cumulative gain or loss is recognized in finance income/costs, or the investment is determined to be impaired, when the cumulative loss is reclassified from the short term investments reserve to the consolidated statement of operations in finance costs. Interest earned whilst holding the short term investments is reported as interest income using the effective interest method. Interest income and foreign exchange revaluation are recognized in the statement of operations in the same manner as all other financial assets. After initial measurement, long term investments are measured at fair value with unrealized gains or losses, including any related foreign exchange impacts, recognized in other comprehensive income and credited in other reserves within equity without recognizing fair value changes to profit and loss upon derecognition Derecognition Financial assets are derecognized when the rights to receive cash flows from the asset have expired. Impairment of financial assets The Group assesses at each reporting date whether there is any evidence that a financial asset or a group of financial assets is impaired, primarily its trade receivables and short term investments. The Group assesses impairment for its financial assets, excluding trade receivables, using the general expected credit losses model. Under this model, the Group calculates the allowance for credit losses by considering on a discounted basis, the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance on the financial asset is the sum of these probability-weighted outcomes. For the Group’s short term investments, the Group applies the low credit risk simplification as it does not believe there to be any credit risk related to these assets given the credit quality ratings required by the Group’s investment policy. At every reporting date, the Group evaluates whether a particular debt instrument is considered to have low credit risk using all supportable information. The Group’s long term investments are not assessed for impairment due to the irrevocable election made under IFRS 9 Financial Instruments The Group uses the simplified approach for measuring impairment for its trade receivables as these financial assets do not have a significant financing component as defined under IFRS 15, Revenue from Contracts with Customers (ii) Financial liabilities Initial recognition and measurement The Group’s financial liabilities are comprised of trade and other payables, other liabilities, and derivative liabilities (warrants and instruments designated for hedging). Prior to April 3, 2018, financial liabilities also included Convertible Notes and contingent options. All financial liabilities are recognized initially at fair value and, in the case of Convertible Notes, net of directly attributable transaction costs. The Group accounted for the Convertible Notes in accordance with IAS 39, Financial Instruments: Recognition and Measurement Financial Instruments The Group accounts for the warrants as a financial liability at fair value. In accordance with IAS 32, Financial Instruments: Presentation Subsequent measurements Other financial liabilities After initial recognition, payables are subsequently measured at amortized cost using the effective interest method. The effective interest method amortization is included in finance costs in the consolidated statement of operations. Gains and losses are recognized in the consolidated statement of operations when the liabilities are derecognized. Payables are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Financial liabilities at fair value through profit or loss After initial recognition, financial liabilities at fair value through the profit or loss are subsequently re-measured at fair value at the end of each reporting period with changes in fair value recognized in finance income or finance costs in the consolidated statement of operations. Derecognition Financial liabilities are derecognized when the obligation under the liability is discharged, cancelled, or expires. (iii) Fair value measurements For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price the Group would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Group’s market assumptions. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, are described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities; • Level 2: other techniques for which inputs are based on quoted prices for identical or similar instruments in markets that are not active, quoted prices for similar instruments in active markets, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the asset or liability; • Level 3: techniques which use inputs that have a significant effect on the recognized fair value that require the Group to use its own assumptions about market participant assumptions. The Group maintains policies and procedures to determine the fair value of financial assets and liabilities using what it considers to be the most relevant and reliable market participant data available. It is the Group’s policy to maximize the use of observable inputs in the measurement of its Level 3 fair value measurements. To the extent observable inputs are not available, the Group utilizes unobservable inputs based upon the assumptions market participants would use in valuing the asset or liability. In determining the fair value of financial assets and liabilities employing Level 3 inputs, the Group considers such factors as the current interest rate, equity market, currency and credit environments, expected future cash flows, the probability of certain future events occurring, and other published data. The Group performs a variety of procedures to assess the reasonableness of its fair value determinations including the use of third parties. (iv) Foreign exchange forward contracts The Group designates certain foreign exchange forward contracts as cash flow hedges when all the requirements in IFRS 9 Financial Instruments Financial Instruments Financial Instruments |
Cash and cash equivalents | (r) Cash and cash equivalents comprise cash on deposit at banks and on hand and short term deposits with a maturity of three months or less from the date of purchase that are not subject to restrictions. Cash deposits that have restrictions governing their use are classified as restricted cash, current or non-current, based on the remaining length of the restriction. The Group classifies highly liquid investments with maturities of three months or less at the date of purchase as cash equivalents. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short term deposits as defined above. |
Short term investments | (s) The Group invests in a variety of instruments, such as commercial paper, money market funds, corporate debt securities, collateralized reverse purchase agreements, and government and government agency debt securities. Part of these investments are held in short duration fixed income portfolios. The average duration of these portfolios is less than one year. All investments are governed by an investment policy and are held in highly-rated counterparties. Separate credit limits are assigned to each counterparty in order to minimize risk concentration. These investments are classified as debt instruments and are carried at fair value with the unrealized gains and losses reported as a component of equity. Management determines the appropriate classification of investments at the time of purchase and re-evaluates whether the investments pass both the hold to collect and sell and solely payments of principal and interest tests. The short term investments with maturities greater than twelve months are classified as short term when they are intended for use in current operations. The cost basis for investments sold is based upon the specific identification method. |
Long term investments | (t) Long term investments consist of non-controlling equity interests in public and private companies where the Group does not exercise significant influence. The investments are classified as equity instruments carried at fair value through other comprehensive income. Refer to Note 22. |
Share capital | (u) Ordinary shares are classified as equity. Equity instruments are initially measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. For the years ended December 31, 2015, 2013, and 2012, the Group issued equity instruments that were part of a compound transaction whereby additional shares would be issued to the shareholders upon the occurrence of certain events (see Note 16). The embedded derivatives were separated from the host contract and the resulting derivative liabilities were initially measured at fair value. The derivative liabilities are re-measured at fair value through the consolidated statement of operations at each reporting period. The difference between the consideration received for the equity instruments and the fair value of the embedded derivatives represents the equity components of the transaction. Transaction costs are allocated to the liability derivatives and equity components in proportion to their initial carrying amounts. In 2018, the Group began repurchasing its ordinary shares. The cost of treasury shares repurchased is shown as a reduction to equity, within treasury shares, on the statement of financial position. When treasury shares are sold, reissued, or retired, the amount received is reflected as an increase to equity based on a weighted average cost, with any surplus or deficit recorded within Other paid in capital. |
Share-based payments | (v) Employees of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services in consideration for equity instruments. The cost of equity-settled transactions with employees is determined by the fair value at the date of grant using an appropriate valuation model. The cost is recognized in the consolidated statement of operations, together with a corresponding credit to other reserves in equity, over the period in which the performance and service conditions are fulfilled. The cost of equity-settled transactions with non-employees for which services are rendered over a vesting period is determined by the average fair value over the period the services are received. The cumulative expense recognized for equity-settled transactions with employees at each reporting date until the vesting date reflects the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense for a period represents the movement in cumulative expense recognized at the beginning and end of that period, and is recognized in employee share-based payments. When the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for modifications that increase the total fair value of the share-based payment transaction or are otherwise beneficial to the grantee as measured at the date of modification. There were no material modifications to any share-based payment transactions during 2018, 2017, and 2016. Social costs are payroll taxes associated with employee salaries and benefits, including share-based compensation. Social costs in connection with granted options and restricted stock units are accrued over the vesting period based on the intrinsic value of the award that has been earned at the end of each reporting period. The amount of the liability reflects the amortization of the award and the impact of expected forfeitures. The social cost rate at which the accrual is made generally follows the tax domicile within which other compensation charges for a grantee are recognized. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 17. In many jurisdictions, tax authorities levy taxes on share-based payment transactions with employees that give rise to a personal tax liability for the employee. In some cases, the Group is required to withhold the tax due and to settle it with the tax authority on behalf of the employees. To fulfil this obligation, the terms of the Group’s restricted stock unit arrangements permit the Group to withhold the number of shares that are equal to the monetary value of the employee’s tax obligation from the total number of shares that otherwise would have been issued to the employee upon vesting of the restricted stock unit. The monetary value of the employee’s tax obligation is recorded as a deduction from Other reserves for the shares withheld. |
Employee benefits | (w) The Group provides defined contribution plans to its employees. The Group pays contributions to publicly and privately administered pension insurance plans on a mandatory or contractual basis. The Group has no further payment obligations once the contributions have been paid. Contributions to defined contribution plans are expensed when employees provide services. The Group’s post-employment schemes do not include any defined benefit plans. |
Provisions | (x) Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. |
Leases | (y) At inception of an arrangement, the Group determines whether the arrangement is or contains a lease. The Group leases certain items of property and equipment. Leases in which substantially all the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated statement of operations on a straight-line basis over the period of the leases. Leases of property and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease’s commencement at lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the repayment of the liability and finance charges. The corresponding lease obligations, net of finance charges, are included in borrowings. The interest element of the finance cost is charged to the consolidated statement of operations over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term. |
New and amended standards and interpretations adopted by the Group | New and amended standards and interpretations adopted by the Group On January 1, 2018, the Group adopted International Financial Reporting Standard (“IFRS”) 9, Financial Instruments Financial Instruments: Recognition and Measurement On January 1, 2018, the Group adopted the amendments to IFRS 2, Share-based Payment |
New standards and interpretations issued not yet effective | New standards and interpretations issued not yet effective Recently issued new or revised/amended standards and interpretations effective for the Group on or after January 1, 2019, are as follows: In June 2017, the International Accounting Standards Board (“IASB”) issued IFRIC Interpretation 23, Uncertainty over Income Tax Treatments . Income Taxes The Group has concluded that its current accounting policies for estimating uncertain tax positions is in line with IFRIC Interpretation 23 and therefore does not expect it to have any material impact on the consolidated financial statements. In January 2016, the IASB published IFRS 16, Leases Leases . On January 1, 2019, the Group will adopt IFRS 16 using the modified retrospective approach and recognize the cumulative effect of initially applying the standard as an adjustment to accumulated deficit. The group intends to elect the available practical expedients on adoption. Although the Group is in the process of evaluating the impact of adoption on its consolidated financial statements, the Group currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the consolidated statement of financial position for real estate operating leases, along with the net impact on transition recorded to accumulated deficit, and deferred tax assets, potentially unrecognized, resulting from the aforementioned changes. The Group expects that this will result in the recognition of additional assets and liabilities in excess of approximately €500 million. The Group’s statement of operations after adoption will reflect additional depreciation expense due to the right-of use assets and an increase in finance costs for effective interest expense on its lease liabilities and be partially offset by a reduction in rental expenses. There will be no impact to the overall statement of cash flows. However, operating cash flows will be positively impacted, while financing cash flows will be negatively impacted due primarily to the classification of principal payments on its lease liabilities. The Group will also be required to disclose additional qualitative and quantitative disclosures as required by the standard within its post adoption interim and annual financial statements. There are no other IFRS or IFRIC interpretations that are not effective that are expected to have a material impact. |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Operating Segments [Line Items] | |
Summary of Key Financial Performance Measures of Segments Including Revenue, Cost of Revenue, and Gross Profit | Key financial performance measures of the segments including revenue, cost of revenue, and gross profit are as follows: 2018 2017 2016 (in € millions) Premium Revenue 4,717 3,674 2,657 Cost of revenue 3,461 2,868 2,221 Gross profit 1,256 806 436 Ad-Supported Revenue 542 416 295 Cost of revenue 445 373 330 Gross (loss)/profit 97 43 (35 ) Consolidated Revenue 5,259 4,090 2,952 Cost of revenue 3,906 3,241 2,551 Gross profit 1,353 849 401 |
Summary of Reconciliation Between Reportable Segment Gross Profit and Loss to Consolidated Loss Before Tax | The reconciliation between reportable segment gross profit to our loss before tax is as follows: 2018 2017 2016 (in € millions) Segment gross profit 1,353 849 401 Research and development (493 ) (396 ) (207 ) Sales and marketing (620 ) (567 ) (368 ) General and administrative (283 ) (264 ) (175 ) Finance income 455 118 152 Finance costs (584 ) (974 ) (336 ) Share in (losses)/earnings of associate (1 ) 1 (2 ) Loss before tax (173 ) (1,233 ) (535 ) |
Summary of Revenue and Non-current Asset by Geographic Country | Revenue by country 2018 2017 2016 (in € millions) United States 1,973 1,577 1,173 United Kingdom 576 444 342 Luxembourg 3 3 1 Other countries 2,707 2,066 1,436 5,259 4,090 2,952 |
Property and Equipment | |
Disclosure Of Operating Segments [Line Items] | |
Summary of Revenue and Non-current Asset by Geographic Country | Non-current assets for this purpose consists of property and equipment. 2018 2017 2016 (in € millions) Sweden 29 32 12 United States 142 28 50 United Kingdom 19 6 19 Other countries 7 7 4 197 73 85 |
Personnel expenses (Tables)
Personnel expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Classes Of Employee Benefits Expense [Abstract] | |
Personal expenses | 7 . 2018 2017 2016 (in € millions, except employee data) Wages and salaries 409 348 231 Social costs 90 136 38 Contributions to retirement plans 20 17 12 Share-based payments 88 65 53 Other employee benefits 60 48 39 667 614 373 Average full-time employees 3,651 2,960 2,084 2018 2017 2016 (in € millions, except employee data) Wages and salaries 409 348 231 Social costs 90 136 38 Contributions to retirement plans 20 17 12 Share-based payments 88 65 53 Other employee benefits 60 48 39 667 614 373 Average full-time employees 3,651 2,960 2,084 |
Auditor remuneration (Tables)
Auditor remuneration (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Auditors Remuneration [Abstract] | |
Summary of Auditor Remuneration | 2018 2017 2016 (in € millions) Auditor fees 4 5 4 |
Finance income and costs (Table
Finance income and costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Finance Income And Costs [Abstract] | |
Summary of Finance Income and Costs | 2018 2017 2016 (in € millions) Finance income Fair value movements on derivative liabilities (Note 22) 376 97 23 Interest income 25 19 5 Other financial income 11 2 — Foreign exchange gains 43 — 124 Total 455 118 152 Finance costs Fair value movements on derivative liabilities (Note 22) (360 ) (303 ) (48 ) Fair value movements on Convertible Notes (Note 22) (201 ) (524 ) (245 ) Interest, bank fees and other costs (6 ) (4 ) (5 ) Foreign exchange losses (17 ) (143 ) (38 ) Total (584 ) (974 ) (336 ) |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Income Tax [Abstract] | |
Summary of Income Tax Expense (Benefit) | 2018 2017 2016 (in € millions) Current tax expense/(benefit) Current year 41 6 5 Changes in estimates in respect to prior year — 1 (1 ) 41 7 4 Deferred tax (benefit)/expense Temporary differences (123 ) (5 ) (1 ) Change in recognition of deferred tax (14 ) — — Change in tax rates 1 — 1 (136 ) (5 ) — Income tax (benefit)/expense (95 ) 2 4 |
Summary of Reconciliation Between Reported Tax Expense and Theoretical Tax Expense Loss Before Taxes | A reconciliation between the reported tax expense for the year, and the theoretical tax expense that would arise when applying the statutory tax rate in Luxembourg of 26.01%, 27.08%, and 29.22%, and on the consolidated loss before taxes for the years ended December 31, 2018, 2017, and 2016, respectively, is shown in the table below: 2018 2017 2016 (in € millions) Loss before tax (173 ) (1,233 ) (535 ) Tax using the Luxembourg tax rate (45 ) (334 ) (156 ) Effect of tax rates in foreign jurisdictions (11 ) (10 ) 15 Permanent differences (7 ) 15 12 Change in unrecognized deferred taxes (43 ) 329 132 Deferred tax on foreign exchange differences 8 — — Other 3 2 1 Income tax (benefit)/expense (95 ) 2 4 |
Schedule of Major Components of Deferred Tax Assets and Liabilities | The major components of deferred tax assets and liabilities are comprised of the following: 2018 2017 (in € millions) Intangible assets (1 ) (4 ) Share-based compensation 6 4 Tax losses carried forward 147 3 Property and equipment 5 3 Unrealized gains (154 ) — Other 3 — Net tax 6 6 |
Summary of Reconciliation of Net Deferred Tax | A reconciliation of net deferred tax is shown in the table below: 2018 2017 2016 (in € millions) At January 1 6 3 4 Movement recognized in consolidated statement of operations 136 5 1 Movement recognized in consolidated statement of changes in equity and other comprehensive income (136 ) 2 (2 ) Movement due to acquisition — (4 ) — At December 31 6 6 3 |
Summary of Deferred Tax Reconciliation to Balance Sheet | Reconciliation to consolidated statement of financial position 2018 2017 (in € millions) Deferred tax assets 8 9 Deferred tax liabilities 2 3 |
Summary of Deferred Tax Assets Unrecognized | Deferred tax assets have not been recognized in respect of the following items, because it is not probable that future taxable profit will be available against which the Group can use the benefits. 2018 2017 (in € millions) Intangible assets 72 74 Share-based compensation 34 115 Tax losses carried forward 148 258 Unrealized losses 2 114 Property and equipment — 4 Foreign tax credits — 4 Other 20 12 276 581 |
Schedule of Tax Loss Carry-forwards Expected to Expire | Tax loss carry-forwards as at December 31, 2018 were expected to expire as follows: Expected expiry 2018-2026 2027 and onwards Unlimited Total (in € millions) Tax loss carry-forwards — 467 1,164 1,631 Foreign tax credits 5 — — 5 |
Loss per share (Tables)
Loss per share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Loss Per Share | The computation of loss per share for the respective periods is as follows 2018 2017 2016 (in € millions, except share and per share data) Basic loss per share Net loss attributable to owners of the parent (78 ) (1,235 ) (539 ) Shares used in computation: Weighted-average ordinary shares outstanding 177,154,405 151,668,769 148,368,720 Basic net loss per share attributable to owners of the parent (0.44 ) (8.14 ) (3.63 ) Diluted loss per share Net loss attributable to owners of the parent (78 ) (1,235 ) (539 ) Fair value adjustments on warrants (14 ) — — Net loss used in the computation of diluted loss per share (92 ) (1,235 ) (539 ) Shares used in computation: Weighted-average ordinary shares outstanding 177,154,405 151,668,769 148,368,720 Warrants 4,055,887 — — Diluted weighted average ordinary shares 181,210,292 151,668,769 148,368,720 Diluted net loss per share attributable to owners of the parent (0.51 ) (8.14 ) (3.63 ) |
Summary of Anti-dilutive Securities | Potential dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: 2018 2017 2016 Employee options 12,243,526 14,646,720 10,976,480 Restricted stock units 100,383 195,937 501,480 Restricted stock awards 61,880 61,880 — Warrants — 6,720,000 5,120,000 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment Leasehold improvements Total (in € millions) Cost At January 1, 2017 111 51 162 Additions 10 29 39 Disposals (11 ) (2 ) (13 ) Exchange differences (5 ) (5 ) (10 ) At December 31, 2017 105 73 178 Additions 3 142 145 Disposals (46 ) (1 ) (47 ) Exchange differences (1 ) 2 1 At December 31, 2018 61 216 277 Accumulated depreciation At January 1, 2017 (62 ) (15 ) (77 ) Depreciation charge (37 ) (9 ) (46 ) Disposals 11 2 13 Exchange differences 4 1 5 At December 31, 2017 (84 ) (21 ) (105 ) Depreciation charge (12 ) (9 ) (21 ) Disposals 45 — 45 Exchange differences 1 — 1 At December 31, 2018 (50 ) (30 ) (80 ) Cost, net accumulated depreciation At December 31, 2017 21 52 73 At December 31, 2018 11 186 197 |
Intangible assets including g_2
Intangible assets including goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Abstract] | |
Summary of Intangible Assets Including Goodwill | Internal development costs and patents Acquired intangible assets Total Goodwill Total (in € millions) Cost At January 1, 2017 8 12 20 73 93 Additions 12 — 12 — 12 Acquisition, business combination (Note 5) — 17 17 71 88 Write off of fully amortized intangibles (2 ) (11 ) (13 ) — (13 ) Exchange differences — (1 ) (1 ) (9 ) (10 ) At December 31, 2017 18 17 35 135 170 Additions 8 — 8 — 8 Acquisition, business combination — 3 3 8 11 Exchange differences — 1 1 3 4 At December 31, 2018 26 21 47 146 193 Accumulated amortization At January 1, 2017 (3 ) (10 ) (13 ) — (13 ) Amortization charge (5 ) (3 ) (8 ) — (8 ) Write off of fully amortized intangibles 2 11 13 — 13 At December 31, 2017 (6 ) (2 ) (8 ) — (8 ) Amortization charge (6 ) (5 ) (11 ) — (11 ) At December 31, 2018 (12 ) (7 ) (19 ) — (19 ) Cost, net accumulated amortization At December 31, 2017 12 15 27 135 162 At December 31, 2018 14 14 28 146 174 |
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 2018 2018 2017 2017 (in € millions) Goodwill 128 18 119 16 |
Restricted cash and other non_2
Restricted cash and other non-current assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Restricted Cash And Other Non Current Assets [Abstract] | |
Summary of Restricted Cash and Other Non-current Assets | 2018 2017 (in € millions) Restricted cash Lease deposits and guarantees 52 41 Other 3 1 Other non-current assets 10 12 65 54 |
Trade and Other Receivables (Ta
Trade and Other Receivables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Trade And Other Receivables [Abstract] | |
Summary of Net Trade and Other Receivables | 2018 2017 (in € millions) Trade receivables 286 295 Less: allowance for expected credit losses (8 ) (15 ) Less: provision for credit reserves (5 ) (8 ) Trade receivables – net 273 272 Other 127 88 400 360 |
Summary of Aging of Group’s Trade Receivables | The aging of the Group’s net trade receivables is as follows: 2018 2017 (in € millions) Current 195 153 Overdue 1 – 30 days 44 69 Overdue 31 – 60 days 19 13 Overdue 60 – 90 days 7 11 Overdue more than 90 days 8 26 273 272 |
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: 2018 2017 (in € millions) At January 1 15 18 Provision for expected credit losses 15 12 Receivables written off (18 ) (3 ) Reversal of unutilized provisions (4 ) (12 ) At December 31 8 15 |
Issued Share Capital and Othe_2
Issued Share Capital and Other Reserves (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Classes Of Share Capital [Abstract] | |
Summary of Other Reserves | Other reserves 2018 2017 2016 (in € millions) Currency translation At January 1 (7 ) (4 ) 8 Currency translation (6 ) (3 ) (12 ) Gains reclassified to consolidated statement of operations (2 ) At December 31 (15 ) (7 ) (4 ) Short term investments At January 1 (5 ) (4 ) — Losses on fair value that may be subsequently reclassified to consolidated statement of operations (2 ) (2 ) (4 ) Losses reclassified to consolidated statement of operations 2 1 — Deferred tax on unrealized losses 1 — — At December 31 (4 ) (5 ) (4 ) Long term investments At January 1 (11 ) — — Gains on fair value not to be subsequently reclassified to consolidated statement of operations 720 (11 ) — Deferred tax on unrealized gains (148 ) — — At December 31 561 (11 ) — Cash flow hedges At January 1 — — — Gains on fair value that may be subsequently reclassified to consolidated statement of operations 1 — — Gains reclassified to revenue (5 ) — — Losses reclassified to cost of revenue 3 — — At December 31 (1 ) — — Share-based payments At January 1 200 130 77 Share-based payments (Note 17) 88 67 53 Income tax impact associated with share-based payments (Note 10) 48 3 — Restricted stock units withheld for employee taxes (2 ) — — At December 31 334 200 130 Other reserves at December 31 875 177 122 |
Share-based Payments (Tables)
Share-based Payments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Share Based Payments [Abstract] | |
Schedule of Activities in RSUs and RSAs Outstanding and Related Information | Activity in the RSUs and RSAs outstanding and related information is as follows: RSU RSA Number of RSUs Weighted average grant date fair value Number of RSAs Weighted average grant date fair value US$ US$ Outstanding at January 1, 2016 627,480 32.78 79,360 23.90 Granted 176,080 41.85 — — Forfeited (140,000 ) 30.38 — — Released (162,080 ) 32.53 (79,360 ) 23.90 Outstanding at December 31, 2016 501,480 36.73 — — Granted 80,920 59.63 61,880 90.65 Forfeited (85,903 ) 37.43 — — Released (300,560 ) 38.95 — — Outstanding at December 31, 2017 195,937 42.46 61,880 90.65 Granted 14,383 168.24 — — Forfeited (15,991 ) 34.93 — — Released (93,946 ) 40.12 — — Outstanding at December 31, 2018 100,383 63.87 61,880 90.65 |
Schedule of Activity in Share Options Outstanding and Related Information | Activity in the share options outstanding and related information is as follows: ESOP Number of options Weighted average exercise price US$ Outstanding at January 1, 2016 9,192,120 22.80 Granted 6,020,360 41.90 Forfeited (512,560 ) 36.03 Exercised (3,661,480 ) 10.15 Expired (61,960 ) 20.93 Outstanding at December 31, 2016 10,976,480 36.88 Granted 5,819,520 64.11 Forfeited (659,000 ) 46.34 Exercised (1,422,520 ) 22.23 Expired (67,760 ) 28.49 Outstanding at December 31, 2017 14,646,720 48.73 Granted 3,578,000 142.20 Forfeited (1,220,508 ) 62.82 Exercised (4,736,555 ) 40.97 Expired (24,131 ) 54.98 Outstanding at December 31, 2018 12,243,526 77.63 Exercisable at December 31, 2016 3,765,000 29.98 Exercisable at December 31, 2017 5,822,400 39.62 Exercisable at December 31, 2018 5,162,876 58.25 |
Summary of Share Options Outstanding | The share options outstanding December 31, 2018, 2017, and 2016 are comprised of the following: 2018 2017 2016 Range of exercise prices (US$) Number of options Weighted average remaining contractual life (years) Number of options Weighted average remaining contractual life (years) Number of options Weighted average remaining contractual life (years) 1.65 to 45.00 4,753,052 1.8 9,039,248 2.7 10,917,960 3.5 45.01 to 90.00 3,337,414 3.2 4,736,432 4.2 58,520 3.2 90.01 to 135.00 2,695,890 3.9 871,040 4.2 — — 135.01 to 180.00 749,360 4.3 — — — — 180.01 to 189.52 707,810 4.2 — — — — 12,243,526 2.9 14,646,720 3.3 10,976,480 3.4 |
Summary of Black-Scholes Option-Pricing Models | The following table lists the inputs to the Black-Scholes option-pricing models used for employee share-based payments for the years ended December 31, 2018, 2017, and 2016: 2018 2017 2016 Expected volatility (%) 32.0 – 34.7 32.0 – 43.5 37.9 – 45.8 Risk-free interest rate (%) 2.4 – 2.9 1.4 – 2.0 0.8 – 1.8 Expected life of share options (years) 2.4 – 4.4 2.4 – 4.4 2.5 – 5.0 Weighted-average share price (US$) 123.13 – 189.52 50.70 – 90.65 41.20 – 44.40 |
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 2018: 2018 (in € millions) Actual stock option expense 46 Stock option expense increase (decrease) under the following assumption changes Volatility decreased by 10% (11 ) Volatility increase by 10% 11 Expected life decrease by 1 year (7 ) Expected life increase by 1 year 6 |
Summary of Expense Recognized in Consolidated Statement of Operations for Employee Share Based Payments | The expense recognized in the consolidated statement of operations for employee share-based payments is as follows: 2018 2017 2016 (in € millions) Cost of revenue 3 2 1 Research and development 40 21 16 Sales and marketing 19 15 10 General and administrative 26 27 26 88 65 53 |
Trade and other payables (Table
Trade and other payables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Trade And Other Payables [Abstract] | |
Summary of Trade and Other Payables | 2018 2017 (in € millions) Trade payables 295 242 Value added tax and sales taxes payable 118 91 Other current liabilities 14 8 427 341 |
Accrued expenses and other li_2
Accrued expenses and other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Accrued Expenses And Other Liabilities [Abstract] | |
Summary of Accrued Expenses and Other Liabilities | 2018 2017 (in € millions) Non-current Deferred rent 85 55 Other accrued liabilities — 1 85 56 Current Accrued fees to rights holders 832 639 Accrued salaries, vacation, and related taxes 41 34 Accrued social costs for options and RSUs 64 87 Other accrued expenses 139 121 1,076 881 1,161 937 |
Provisions (Tables)
Provisions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Provisions [Abstract] | |
Summary of Changes in Groups Provisions | Legal contingencies Other Total (in € millions) Carrying amount at January 1, 2017 49 12 61 Charged/(credited) to the consolidated statement of operations: Additional provisions 60 7 67 Reversal of unutilized amounts — (1 ) (1 ) Exchange differences (11 ) — (11 ) Utilized (45 ) (6 ) (51 ) Carrying amount at December 31, 2017 53 12 65 Charged/(credited) to the consolidated statement of operations: Additional provisions — 7 7 Exchange differences 3 — 3 Utilized (17 ) (8 ) (25 ) Carrying amount at December 31, 2018 39 11 50 As at December 31, 2017: Current portion 53 6 59 Non-current portion — 6 6 As at December 31, 2018: Current portion 39 3 42 Non-current portion — 8 8 |
Financial Risk Management and_2
Financial Risk Management and Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |
Summary of Liquidity Position in Terms of Available Cash and Cash Equivalents and Short Term Investments | The Group’s policy is to have a strong liquidity position in terms of available cash and cash equivalents, and short term investments. 2018 2017 (in € millions) Liquidity Short term investments 915 1,032 Short term deposits 307 122 Cash at bank and on hand 584 355 Total surplus liquidity 1,806 1,509 Liquidity position 1,806 1,509 |
Summary of Immediate Impact on Net Loss Before Tax on Exchange Rate | The table below shows the immediate impact on net loss before tax of a 10% strengthening in the closing exchange rate of significant currencies to which the Group had exposure, at December 31, 2018 and 2017 2018 AUD EUR GBP USD (in € millions) (Increase)/decrease in loss before tax 7 (3 ) 3 74 2017 AUD EUR GBP USD (in € millions) (Increase)/decrease in loss before tax 5 2 (2 ) 9 |
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, 2018: Notional amount in foreign currency Australian dollar (AUD) British pound (GBP) Swedish krona (SEK) U.S. dollar (USD) (in millions) Hedged line item in consolidated statement of operations Revenue 187 282 1,112 27 Cost of revenue 143 202 757 21 Total 330 484 1,869 48 |
Summary of Major Security Type, Financial Assets and Liabilities Measured at Fair Value on Recurring Basis and Category Using Fair Value Hierarchy | The following tables summarize, by major security type, our 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 2018 (in € millions) Financial assets at fair value Short term investments: Government securities 164 57 — 221 Agency securities — 7 — 7 Corporate notes — 343 — 343 Collateralized reverse purchase agreements — 344 — 344 Derivatives (not designated for hedging): Other — — 2 2 Derivatives (designated for hedging): Foreign exchange forwards — 6 — 6 Long term investments 1,630 — 16 1,646 Total financial assets at fair value by level 1,794 757 18 2,569 Financial liabilities at fair value Derivatives (not designated for hedging): Warrants — — 333 333 Derivatives (designated for hedging): Foreign exchange forwards — 6 — 6 Total financial liabilities at fair value by level — 6 333 339 Financial assets and liabilities by fair value hierarchy level Level 1 Level 2 Level 3 2017 (in € millions) Financial assets at fair value Short term investments: Government securities 206 38 — 244 Agency securities — 7 — 7 Corporate notes — 330 — 330 Collateralized reverse purchase agreements — 451 — 451 Derivatives (not designated for hedging): Foreign exchange forwards — 2 — 2 Derivatives (designated for hedging): Foreign exchange forwards — 6 — 6 Long term investment — — 910 910 Total financial assets at fair value by level 206 834 910 1,950 Financial liabilities at fair value Convertible Notes — — 944 944 Derivatives (not designated for hedging): Contingent options — — 3 3 Warrants — — 346 346 Derivatives (designated for hedging): Foreign exchange forwards — 5 — 5 Total financial liabilities at fair value by level — 5 1,293 1,298 |
Summary of Changes in Long Term Investments | The table below presents the changes in the long term investments: 2018 2017 (in € millions) At January 1 910 — Equity issued in exchange for long term investment — 910 Changes in fair value recorded in other comprehensive loss 720 — Purchase of investment 16 — At December 31 1,646 910 |
Summary of Weightings Applied to Valuation Method | The following weightings, up until the Group’s direct listing, were applied to each valuation method: 2018 2017 2016 PWERM 50% 50 – 80% 80 – 100% Secondary market transactions 50% 20 – 50% 0 – 20% |
Summary of Key Assumptions Used to Estimate Fair Value of Ordinary Shares and Contingent Options | The key assumptions used to estimate the fair value of the ordinary shares and contingent options using the PWERM, up until the Group’s direct listing, were as follows: 2018 2017 2016 Revenue multiple used to estimate enterprise value 3.0 2.2 – 4.6 2.0 – 3.5 Discount rate (%) 13.0 13.0 – 19.5 14.0 – 19.5 Volatility (%) 32.5 – 35.0 30.0 – 37.5 35.0 – 47.5 |
Summary of Changes in Contingent Options Liability Explanatory | The table below presents the changes in the contingent options liability as at December 31: 2018 2017 2016 (in € millions) At January 1 3 100 82 (Gain)/loss recognized in profit or loss (3 ) (97 ) 18 At December 31 — 3 100 |
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: 2018 2017 2016 Expected term (years) 0.6 – 1.7 0.9 – 1.6 1.9 – 2.1 Risk free rate (%) 1.98 – 2.73 1.17 – 1.76 0.77 – 1.14 Volatility (%) 32.5 – 40.0 30.0 – 37.5 35.0 – 37.5 Share price (US$) 113.50 – 180.83 50.70 – 120.50 42.18 – 44.40 |
Summary of Changes in Warrants Liability | The table below presents the changes in the warrants liability: 2018 2017 2016 (in € millions) At January 1 346 34 — Issuance of warrant for cash — 9 27 Non cash changes in profit or loss Changes in fair value (39 ) 313 7 Effect of changes in foreign exchange rates 26 (10 ) — At December 31 333 346 34 |
Summary of Changes in Convertible Notes | The table below presents the changes in the Convertible Notes: 2018 2017 2016 (in € millions) At January 1 944 1,106 — Loan financing transaction - Convertible Notes — — 861 Non cash changes recognized in profit or loss Changes in fair value 221 666 166 Effect of changes in foreign exchange rates (20 ) (142 ) 79 Issuance of shares upon exchange of Convertible Notes (1,145 ) (686 ) — At December 31 — 944 1,106 |
PWERM | |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |
Summary of Weightings Applied to Valuation Method | The PWERM valuations, up until the Group’s direct listing, weighted the different scenarios as follows: 2018 2017 2016 Market Approach – High Case Public Company 55 – 70% 25 – 40% 20 – 25% Market Approach – Low Case Public Company 28 – 35% 35% 35 – 40% Market Approach – High Case Transaction 0 – 3% 4 – 6% 4% Market Approach – Low Case Transaction 0 – 2% 4 – 6% 6% Private Case – Income and Market Approaches 2 – 5% 5 – 30% 30% |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancellable Operating Leases | The future minimum lease payments under non-cancellable operating leases as at December 31 are as follows: 2018 2017 2016 (in € millions) Not later than one year 62 47 25 Later than one year but not more than 5 years 288 244 97 More than 5 years 483 478 90 833 769 212 |
Schedule of Minimum Royalty Payments Associated With License Agreements | The Group is subject to the following minimum royalty payments associated with its license agreements as at December 31. 2018 2017 2016 (in € millions) Not later than one year 548 1,060 26 Later than one year but not more than 5 years 152 635 14 700 1,695 40 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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. 2018 2017 2016 (in € millions) Key management compensation Short term employee benefits 4 4 4 Share-based payments 19 17 18 Post-employment benefits — — 1 Termination benefits 1 1 1 24 22 24 |
Group information (Tables)
Group information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Significant Investments In Subsidiaries [Abstract] | |
Summary of Company's Principal Subsidiaries | The Company’s principal subsidiaries as at December 31, 2018 are as follows: Name Principal activities Proportion of voting rights and shares held (directly or indirectly) Country of incorporation Spotify AB Main operating company 100 % Sweden Spotify USA Inc. USA operating company 100 % USA Spotify Ltd Sales, marketing, contract research and development, and customer support 100 % UK Spotify Norway AS Sales and marketing 100 % Norway Spotify Spain S.L. Sales and marketing 100 % Spain Spotify GmbH Sales and marketing 100 % Germany Spotify France SAS Sales and marketing 100 % France Spotify Netherlands B.V. Sales and marketing 100 % Netherlands Spotify Canada Inc. Sales and marketing 100 % Canada Spotify Australia Pty Ltd Sales and marketing 100 % Australia Spotify Brasil Serviços De Música LTDA Sales and marketing 100 % Brazil Spotify Japan K.K Sales and marketing 100 % Japan Spotify Singapore Pte Ltd. Marketing 100 % Singapore |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - EUR (€) € in Millions | Jan. 01, 2019 | Dec. 31, 2018 |
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 | |
Periods of maturity for highly liquid investments | three months or less | |
Material modifications to any share-based payment transactions | There were no material modifications to any share-based payment transactions during 2018, 2017, and 2016 | |
Adoption of New Accounting Standards | ||
Disclosure of summary of significant accounting policies [line items] | ||
Increase in assets and liabilities | € 500 | |
Top of range | ||
Disclosure of summary of significant accounting policies [line items] | ||
Average duration of investment portfolio | 1 year | |
Acquired Developed Technology and Patents | ||
Disclosure of summary of significant accounting policies [line items] | ||
Estimated useful lives | 2 to 5 years | |
Property and Equipment | ||
Disclosure of summary of significant accounting policies [line items] | ||
Estimated useful lives | 3 to 5 | |
Leasehold Improvements | ||
Disclosure of summary of significant accounting policies [line items] | ||
Estimated useful lives | shorter of the lease term or useful life |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Contract Liabilities [Abstract] | |||
Deferred revenue | € 258 | € 216 | |
Description of when entity typically satisfies performance obligations | over a period up to a year | ||
Revenue recognition | € 210 | € 149 | € 92 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) € in Millions | 12 Months Ended | ||
Dec. 31, 2018shares | Dec. 31, 2017EUR (€)sharesBusiness | Dec. 31, 2016shares | |
Restricted Stock Awards | |||
Disclosure of detailed information about business combination [line items] | |||
Share-based payment transactions | shares | 0 | 61,880 | 0 |
Acquisitions in 2017 | |||
Disclosure of detailed information about business combination [line items] | |||
Number of business acquired | Business | 5 | ||
Total purchase consideration | € 85 | ||
Cash paid for business acquisition | 52 | ||
Issue of equity for business acquisition | 33 | ||
Goodwill | 71 | ||
Acquired intangible assets | 17 | ||
Deferred tax liabilities | 4 | ||
Tangible assets | 1 | ||
Acquisitions in 2017 | Arrangement One | |||
Disclosure of detailed information about business combination [line items] | |||
Business combination, compensation expenses | € 6 | ||
Acquisitions in 2017 | Arrangement One | Restricted Stock Awards | |||
Disclosure of detailed information about business combination [line items] | |||
Share-based payment transactions | shares | 61,880 | ||
Acquisitions in 2017 | Top of range | |||
Disclosure of detailed information about business combination [line items] | |||
Business combination, compensation expenses | € 22 | ||
Business combination, compensation expenses service period | 3 years | ||
Acquisitions in 2017 | Top of range | Arrangement One | |||
Disclosure of detailed information about business combination [line items] | |||
Business combination, compensation expenses service period | 3 years | ||
Acquisitions in 2017 | Bottom Of Range [Member] | Arrangement One | |||
Disclosure of detailed information about business combination [line items] | |||
Business combination, compensation expenses service period | 2 years |
Segment Information - Additiona
Segment Information - Additional Information (Details) | Dec. 31, 2018EUR (€)Segment | Dec. 31, 2017EUR (€) | Dec. 31, 2016EUR (€) |
Disclosure Of Operating Segments [Line Items] | |||
Number of reportable segment | Segment | 2 | ||
Property and equipment | € 197,000,000 | € 73,000,000 | |
Luxembourg | |||
Disclosure Of Operating Segments [Line Items] | |||
Property and equipment | € 0 | € 0 | € 0 |
Segment Information - Summary o
Segment Information - Summary of Key Financial Performance Measures of Segments Including Revenue, Cost of Revenue, and Gross Profit (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Operating Segments [Line Items] | |||
Revenue | € 5,259 | € 4,090 | € 2,952 |
Cost of revenue | 3,906 | 3,241 | 2,551 |
Gross (loss)/profit | 1,353 | 849 | 401 |
Premium | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | 4,717 | 3,674 | 2,657 |
Cost of revenue | 3,461 | 2,868 | 2,221 |
Gross (loss)/profit | 1,256 | 806 | 436 |
Ad-Supported | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | 542 | 416 | 295 |
Cost of revenue | 445 | 373 | 330 |
Gross (loss)/profit | € 97 | € 43 | € (35) |
Segment Information - Summary_2
Segment Information - Summary of Reconciliation Between Reportable Segment Gross Profit and Loss to Consolidated Loss Before Tax (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Operating Segments [Abstract] | |||
Segment gross profit | € 1,353 | € 849 | € 401 |
Research and development | (493) | (396) | (207) |
Sales and marketing | (620) | (567) | (368) |
General and administrative | (283) | (264) | (175) |
Finance income | 455 | 118 | 152 |
Finance costs | (584) | (974) | (336) |
Share in (losses)/earnings of associate | (1) | 1 | (2) |
Loss before tax | € (173) | € (1,233) | € (535) |
Segment Information - Summary_3
Segment Information - Summary of Revenue by Geographic Area (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Operating Segments [Line Items] | |||
Revenue | € 5,259 | € 4,090 | € 2,952 |
United States | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | 1,973 | 1,577 | 1,173 |
United Kingdom | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | 576 | 444 | 342 |
Luxembourg | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | 3 | 3 | 1 |
Other Countries | |||
Disclosure Of Operating Segments [Line Items] | |||
Revenue | € 2,707 | € 2,066 | € 1,436 |
Segment Information - Summary_4
Segment Information - Summary of Non-current Asset by Geographic Area (Details) - EUR (€) € in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 29, 2017 | Dec. 31, 2016 |
Disclosure Of Operating Segments [Line Items] | ||||
Non-current assets | € 2,090 | € 1,209 | ||
Property and Equipment | ||||
Disclosure Of Operating Segments [Line Items] | ||||
Non-current assets | 197 | € 73 | € 85 | |
Property and Equipment | Sweden | ||||
Disclosure Of Operating Segments [Line Items] | ||||
Non-current assets | 29 | 32 | 12 | |
Property and Equipment | United States | ||||
Disclosure Of Operating Segments [Line Items] | ||||
Non-current assets | 142 | 28 | 50 | |
Property and Equipment | United Kingdom | ||||
Disclosure Of Operating Segments [Line Items] | ||||
Non-current assets | 19 | 6 | 19 | |
Property and Equipment | Other Countries | ||||
Disclosure Of Operating Segments [Line Items] | ||||
Non-current assets | € 7 | € 7 | € 4 |
Personnel Expenses - Summary of
Personnel Expenses - Summary of Personnel Expense (Detail) € in Millions | 12 Months Ended | ||
Dec. 31, 2018EUR (€)Employee | Dec. 31, 2017EUR (€)Employee | Dec. 31, 2016EUR (€)Employee | |
Classes Of Employee Benefits Expense [Abstract] | |||
Wages and salaries | € 409 | € 348 | € 231 |
Social costs | 90 | 136 | 38 |
Contributions to retirement plans | 20 | 17 | 12 |
Share-based payments | 88 | 65 | 53 |
Other employee benefits | 60 | 48 | 39 |
Personnel expenses | € 667 | € 614 | € 373 |
Average full-time employees | Employee | 3,651 | 2,960 | 2,084 |
Auditor Remuneration - Summary
Auditor Remuneration - Summary of Auditor Remuneration (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Auditors Remuneration [Abstract] | |||
Auditor fees | € 4 | € 5 | € 4 |
Finance Income and Costs - Summ
Finance Income and Costs - Summary of Finance Income and Cost (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finance income | |||
Fair value movements on derivative liabilities | € 376 | € 97 | € 23 |
Interest income | 25 | 19 | 5 |
Other financial income | 11 | 2 | 0 |
Foreign exchange gains | 43 | 0 | 124 |
Total | 455 | 118 | 152 |
Finance costs | |||
Fair value movements on derivative liabilities | (360) | (303) | (48) |
Fair value movements on Convertible Notes | (201) | (524) | (245) |
Interest, bank fees and other costs | (6) | (4) | (5) |
Foreign exchange losses | (17) | (143) | (38) |
Total | € (584) | € (974) | € (336) |
Income Tax - Summary of Income
Income Tax - Summary of Income Tax Expense (Benefit) (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current tax expense/(benefit) | |||
Current year | € 41 | € 6 | € 5 |
Changes in estimates in respect to prior year | 0 | 1 | (1) |
Total current tax expense/(benefit) | 41 | 7 | 4 |
Deferred tax (benefit)/expense | |||
Temporary differences | (123) | (5) | (1) |
Change in recognition of deferred tax | (14) | 0 | 0 |
Change in tax rates | 1 | 0 | 1 |
Total deferred tax expense/(benefit) | (136) | (5) | 0 |
Income tax (benefit)/expense | € (95) | € 2 | € 4 |
Income Tax - Additional Informa
Income Tax - Additional Information (Details) - EUR (€) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Income Tax [Line Items] | |||
Income tax relating to components of other comprehensive income | € 147,000,000 | € 0 | € 0 |
Uncertain tax position liability, expected to be resolved | 1,000,000 | ||
Deferred tax on foreign exchange differences | 8,000,000 | € 0 | € 0 |
Deferred tax liability recognized on investment in subsidiaries | € 0 | ||
Luxembourg | |||
Disclosure Of Income Tax [Line Items] | |||
Statutory tax rate | 26.01% | 27.08% | 29.22% |
Provisions | |||
Disclosure Of Income Tax [Line Items] | |||
Current income tax expense on uncertain tax positions | € 1,000,000 | ||
Uncertain tax position liability | € 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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation Of Average Effective Tax Rate And Applicable Tax Rate [Abstract] | |||
Loss before tax | € (173) | € (1,233) | € (535) |
Tax using the Luxembourg tax rate | (45) | (334) | (156) |
Effect of tax rates in foreign jurisdictions | (11) | (10) | 15 |
Permanent differences | (7) | 15 | 12 |
Change in unrecognized deferred taxes | (43) | 329 | 132 |
Deferred tax on foreign exchange differences | 8 | 0 | 0 |
Other | 3 | 2 | 1 |
Income tax (benefit)/expense | € (95) | € 2 | € 4 |
Income Tax - Schedule of Major
Income Tax - Schedule of Major Components of Deferred Tax Assets and Liabilities (Details) - EUR (€) € in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | € 6 | € 6 | € 3 | € 4 |
Intangible Assets | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | (1) | (4) | ||
Share-based Compensation | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | 6 | 4 | ||
Tax Losses Carried Forward | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | 147 | 3 | ||
Property and Equipment | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | 5 | 3 | ||
Unrealized Gains | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | (154) | 0 | ||
Other | ||||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||||
Deferred tax assets and liabilities | € 3 | € 0 |
Income Tax - Summary of Recon_2
Income Tax - Summary of Reconciliation of Net Deferred Tax (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation Of Changes In Deferred Tax Liability Asset [Abstract] | |||
At January 1 | € 6 | € 3 | € 4 |
Movement recognized in consolidated statement of operations | 136 | 5 | 1 |
Movement recognized in consolidated statement of changes in equity and other comprehensive income | (136) | 2 | (2) |
Movement due to acquisition | 0 | (4) | 0 |
At December 31 | € 6 | € 6 | € 3 |
Income Tax - Summary of Deferre
Income Tax - Summary of Deferred Tax Reconciliation to Balance Sheet (Details) - EUR (€) € in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets And Liabilities [Abstract] | ||
Deferred tax assets | € 8 | € 9 |
Deferred tax liabilities | € 2 | € 3 |
Income Tax - Summary of Defer_2
Income Tax - Summary of Deferred Tax Assets Unrecognized (Details) - EUR (€) € in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | € 276 | € 581 |
Intangible Assets | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 72 | 74 |
Share-based Compensation | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 34 | 115 |
Tax Losses Carried Forward | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 148 | 258 |
Unrealized Losses | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 2 | 114 |
Property and Equipment | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 0 | 4 |
Foreign Tax Credits | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | 0 | 4 |
Other | ||
Disclosure Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax assets unrecognized | € 20 | € 12 |
Income Tax - Schedule of Tax Lo
Income Tax - Schedule of Tax Loss Carry-forwards Expected To Expire (Details) € in Millions | Dec. 31, 2018EUR (€) |
Tax Losses Carried Forward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | € 1,631 |
Foreign Tax Credits | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 5 |
2018-2026 | Tax Losses Carried Forward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 0 |
2018-2026 | Foreign Tax Credits | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 5 |
2027 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 | 467 |
2027 and Onwards | Foreign Tax Credits | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 0 |
Unlimited | Tax Losses Carried Forward | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | 1,164 |
Unlimited | Foreign Tax Credits | |
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items] | |
Tax loss carry-forwards expected to expire | € 0 |
Loss Per Share - Summary of Com
Loss Per Share - Summary of Computation of Loss Per Share (Details) - EUR (€) € / shares in Units, € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic loss per share | |||
Net loss attributable to owners of the parent | € (78) | € (1,235) | € (539) |
Weighted-average ordinary shares outstanding | 177,154,405 | 151,668,769 | 148,368,720 |
Basic | € (0.44) | € (8.14) | € (3.63) |
Diluted loss per share | |||
Net loss attributable to owners of the parent | € (78) | € (1,235) | € (539) |
Fair value adjustments on warrants | (14) | ||
Net loss used in the computation of diluted loss per share | € (92) | € (1,235) | € (539) |
Weighted-average ordinary shares outstanding | |||
Weighted-average ordinary shares outstanding | 177,154,405 | 151,668,769 | 148,368,720 |
Warrants | 4,055,887 | ||
Diluted weighted average ordinary shares | 181,210,292 | 151,668,769 | 148,368,720 |
Diluted | € (0.51) | € (8.14) | € (3.63) |
Loss Per Share - Summary of Ant
Loss Per Share - Summary of Anti-dilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Options | |||
Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 12,243,526 | 14,646,720 | 10,976,480 |
Restricted Stock Units | |||
Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 100,383 | 195,937 | 501,480 |
Restricted Stock Awards | |||
Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 61,880 | 61,880 | |
Warrants | |||
Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 6,720,000 | 5,120,000 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Detail) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | € 73 | |
Ending Balance | 197 | € 73 |
Cost | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | 178 | 162 |
Additions | 145 | 39 |
Disposals | (47) | (13) |
Exchange differences | 1 | (10) |
Ending Balance | 277 | 178 |
Accumulated Depreciation | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | (105) | (77) |
Depreciation charge | (21) | (46) |
Disposals | 45 | 13 |
Exchange differences | 1 | 5 |
Ending Balance | (80) | (105) |
Property and Equipment | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | 21 | |
Ending Balance | 11 | 21 |
Property and Equipment | Cost | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | 105 | 111 |
Additions | 3 | 10 |
Disposals | (46) | (11) |
Exchange differences | (1) | (5) |
Ending Balance | 61 | 105 |
Property and Equipment | Accumulated Depreciation | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | (84) | (62) |
Depreciation charge | (12) | (37) |
Disposals | 45 | 11 |
Exchange differences | 1 | 4 |
Ending Balance | (50) | (84) |
Leasehold Improvements | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | 52 | |
Ending Balance | 186 | 52 |
Leasehold Improvements | Cost | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | 73 | 51 |
Additions | 142 | 29 |
Disposals | (1) | (2) |
Exchange differences | 2 | (5) |
Ending Balance | 216 | 73 |
Leasehold Improvements | Accumulated Depreciation | ||
Disclosure Of Property Plant And Equipment [Line Items] | ||
Beginning Balance | (21) | (15) |
Depreciation charge | (9) | (9) |
Disposals | 2 | |
Exchange differences | 1 | |
Ending Balance | € (30) | € (21) |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - EUR (€) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Property Plant And Equipment [Abstract] | ||
Accelerated depreciation | € 0 | € 11,000,000 |
Leasehold improvements not placed into service | € 113,000,000 | € 10,000,000 |
Intangible Assets Including G_3
Intangible Assets Including Goodwill - Summary of Intangible Assets Including Goodwill (Detail) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | € 27 | |
Ending balance, intangible assets | 28 | € 27 |
Beginning balance | 162 | |
Ending balance | 174 | 162 |
Goodwill | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance | 135 | |
Ending balance | 146 | 135 |
Cost | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | 35 | 20 |
Additions | 8 | 12 |
Acquisition, business combination (Note 5) | 3 | 17 |
Amortization charge | 0 | |
Write off of fully amortized intangibles | (13) | |
Exchange differences | 1 | (1) |
Ending balance, intangible assets | 47 | 35 |
Beginning balance | 170 | 93 |
Additions | 8 | 12 |
Acquisition, business combination (Note 5) | 11 | 88 |
Write off of fully amortized intangibles | (13) | |
Exchange differences | 4 | (10) |
Ending balance | 193 | 170 |
Cost | Goodwill | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance | 135 | 73 |
Additions | 0 | 0 |
Acquisition, business combination (Note 5) | 8 | 71 |
Exchange differences | 3 | (9) |
Ending balance | 146 | 135 |
Accumulated Depreciation | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | (8) | (13) |
Amortization charge | (11) | (8) |
Write off of fully amortized intangibles | 13 | |
Ending balance, intangible assets | (19) | (8) |
Beginning balance | (8) | (13) |
Write off of fully amortized intangibles | 13 | |
Ending balance | (19) | (8) |
Internal development costs and patents | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | 12 | |
Ending balance, intangible assets | 14 | 12 |
Internal development costs and patents | Cost | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | 18 | 8 |
Additions | 8 | 12 |
Acquisition, business combination (Note 5) | 0 | 0 |
Amortization charge | 0 | |
Write off of fully amortized intangibles | (2) | |
Exchange differences | 0 | 0 |
Ending balance, intangible assets | 26 | 18 |
Internal development costs and patents | Accumulated Depreciation | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | (6) | (3) |
Amortization charge | (6) | (5) |
Write off of fully amortized intangibles | 2 | |
Ending balance, intangible assets | (12) | (6) |
Acquired intangible assets | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | 15 | |
Ending balance, intangible assets | 14 | 15 |
Acquired intangible assets | Cost | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | 17 | 12 |
Additions | 0 | 0 |
Acquisition, business combination (Note 5) | 3 | 17 |
Amortization charge | 0 | |
Write off of fully amortized intangibles | (11) | |
Exchange differences | 1 | (1) |
Ending balance, intangible assets | 21 | 17 |
Acquired intangible assets | Accumulated Depreciation | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Beginning balance, intangible assets | (2) | (10) |
Amortization charge | (5) | (3) |
Write off of fully amortized intangibles | 11 | |
Ending balance, intangible assets | € (7) | € (2) |
Intangible Assets Including G_4
Intangible Assets Including Goodwill - Additional Information (Details) € in Millions | 12 Months Ended | ||
Dec. 31, 2018EUR (€)Segment | Dec. 31, 2017EUR (€) | Dec. 31, 2016EUR (€) | |
Intangible Assets And Goodwill [Abstract] | |||
Amortization included in research and development | € | € 11 | € 8 | € 5 |
Number of operating segments | Segment | 2 |
Intangible Assets Including G_5
Intangible Assets Including Goodwill - Schedule of Carrying Amount of Goodwill Allocated to Each of the Operating Segments (Details) - EUR (€) € in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Premium | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Goodwill | € 128 | € 119 |
Ad-Supported | ||
Disclosure Of Reconciliation Of Changes In Intangible Assets And Goodwill [Line Items] | ||
Goodwill | € 18 | € 16 |
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, 2018 | Dec. 31, 2017 |
Restricted cash | ||
Lease deposits and guarantees | € 52 | € 41 |
Other | 3 | 1 |
Other non-current assets | 10 | 12 |
Restricted cash and other non-current assets | € 65 | € 54 |
Trade and Other Receivables - S
Trade and Other Receivables - Summary of Trade and Other Receivables (Details) - EUR (€) € in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Trade And Other Receivables [Abstract] | ||
Trade receivables | € 286 | € 295 |
Less: allowance for expected credit losses | (8) | (15) |
Less: provision for credit reserves | (5) | (8) |
Trade receivables – net | 273 | 272 |
Other | 127 | 88 |
Trade and other receivables | € 400 | € 360 |
Trade and Other Receivables -Ad
Trade and Other Receivables -Additional Information (Detail) € in Millions | Dec. 31, 2018EUR (€) |
Trade And Other Receivables [Abstract] | |
Other recivables recovered from rights holders | € 18 |
Trade and Other Receivables -_2
Trade and Other Receivables - Summary of Aging of Group's Net Trade Receivables (Details) - EUR (€) € in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | € 273 | € 272 |
Financial Assets Past Due but Not Impaired | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 273 | 272 |
Financial Assets Past Due but Not Impaired | Current | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 195 | 153 |
Financial Assets Past Due but Not Impaired | Overdue 1 – 30 Days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 44 | 69 |
Financial Assets Past Due but Not Impaired | Overdue 31 – 60 Days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 19 | 13 |
Financial Assets Past Due but Not Impaired | Overdue 60 – 90 Days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | 7 | 11 |
Financial Assets Past Due but Not Impaired | Overdue More than 90 Days | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Trade receivables | € 8 | € 26 |
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, 2018 | Dec. 31, 2017 | |
Disclosure Of Trade And Other Receivables [Line Items] | ||
Beginning balance | € 15 | |
Ending balance | 8 | € 15 |
Trade Receivables | ||
Disclosure Of Trade And Other Receivables [Line Items] | ||
Beginning balance | 15 | 18 |
Provision for expected credit losses | 15 | 12 |
Receivables written off | (18) | (3) |
Reversal of unutilized provisions | (4) | (12) |
Ending balance | € 8 | € 15 |
Issued Share Capital and Othe_3
Issued Share Capital and Other Reserves - Additional Information (Details) € / shares in Units, $ / shares in Units, $ in Millions | Apr. 03, 2018EUR (€) | Feb. 16, 2018Beneficiary_Certificate | Dec. 29, 2017USD ($)shares | Dec. 15, 2017USD ($) | Jul. 13, 2017EUR (€)shares | Jul. 13, 2017$ / shares | Oct. 17, 2016EUR (€)shares | Oct. 17, 2016$ / shares | Jan. 17, 2014EUR (€)shares | Dec. 19, 2013EUR (€)shares | Nov. 13, 2012EUR (€)shares | Jan. 31, 2018USD ($)shares | Dec. 31, 2013EUR (€) | Dec. 31, 2012EUR (€) | Dec. 31, 2018EUR (€)Beneficiary_Certificate€ / sharesshares | Dec. 31, 2017EUR (€)€ / sharesshares | Dec. 31, 2016€ / sharesshares | Dec. 31, 2018USD ($)Beneficiary_Certificateshares | Mar. 07, 2018shares | Jan. 01, 2018shares | Dec. 15, 2017EUR (€)shares | Nov. 20, 2013shares |
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Authorized and subscribed shares | shares | 403,032,520 | 403,001,760 | 403,001,760 | 403,032,520 | ||||||||||||||||||
Authorized and subscribed shares, par value | € / shares | € 0.000625 | € 0.000625 | € 0.000625 | |||||||||||||||||||
Ordinary shares issued | shares | 1,754,960 | 4,204,120 | 9,431,960 | 9,431,960 | 4,800,000 | 8,233,160 | ||||||||||||||||
Gross proceeds from issuance of ordinary shares | € 79,000,000 | |||||||||||||||||||||
Transaction costs incurred | € 3,000,000 | |||||||||||||||||||||
Contingent options recognized as derivative liability | € 31,000,000 | € 39,000,000 | ||||||||||||||||||||
Long term investments | € 1,646,000,000 | € 910,000,000 | ||||||||||||||||||||
Convertible notes exchanged principal amount | $ | $ 110 | $ 301 | $ 628 | |||||||||||||||||||
Number of beneficiary certificates issued per share | Beneficiary_Certificate | 10 | |||||||||||||||||||||
Number of beneficiary certificates held by founders | Beneficiary_Certificate | 364,785,640 | 364,785,640 | ||||||||||||||||||||
Convertible notes | € 1,100,000,000 | |||||||||||||||||||||
Dividends recognised as distributions to owners | € 0 | |||||||||||||||||||||
Number of ordinary shares repurchased | shares | 6,427,271 | 0 | 0 | |||||||||||||||||||
Number of treasury shares reissued | shares | 3,382,312 | 0 | 0 | |||||||||||||||||||
Number of ordinary shares held as treasury shares | shares | 3,044,959 | 0 | 3,044,959 | |||||||||||||||||||
Spotify Netherlands B.V. | ||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Ordinary shares issued | shares | 5,740,000 | |||||||||||||||||||||
Certain Members of Key Management | ||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Proceeds from warrants issued | € 27,000,000 | |||||||||||||||||||||
Number of ordinary shares that can be acquired from warrants issued | shares | 5,120,000 | |||||||||||||||||||||
Excercise price of each warrant | $ / shares | $ 50.61 | |||||||||||||||||||||
Exercise price of each warrant to fair market value of ordinary shares on date of issuance | 120.00% | |||||||||||||||||||||
Warrants expiry date | Oct. 17, 2019 | |||||||||||||||||||||
Employee and Member of Management of Group | ||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Proceeds from warrants issued | € 9,000,000 | |||||||||||||||||||||
Number of ordinary shares that can be acquired from warrants issued | shares | 1,600,000 | |||||||||||||||||||||
Excercise price of each warrant | $ / shares | $ 89.73 | |||||||||||||||||||||
Exercise price of each warrant to fair market value of ordinary shares on date of issuance | 130.00% | |||||||||||||||||||||
Warrants expiry | 2020-07 | |||||||||||||||||||||
TME | ||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Ordinary shares issued | shares | 8,552,440 | |||||||||||||||||||||
Long term investments | € 910,000,000 | |||||||||||||||||||||
Transfer restrictions period | 3 years | |||||||||||||||||||||
First Closing | ||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Ordinary shares issued | shares | 5,584,160 | |||||||||||||||||||||
Gross proceeds from issuance of ordinary shares | € 123,000,000 | |||||||||||||||||||||
Transaction costs incurred | € 2,000,000 | |||||||||||||||||||||
Second Closing | ||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Ordinary shares issued | shares | 2,649,000 | |||||||||||||||||||||
Gross proceeds from issuance of ordinary shares | € 58,000,000 | |||||||||||||||||||||
April 17, June 9, and July 15, 2015 | ||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Ordinary shares issued | shares | 9,484,880 | 9,484,880 | ||||||||||||||||||||
Gross proceeds from issuance of ordinary shares | € 479,000,000 | |||||||||||||||||||||
Transaction costs incurred | 5,000,000 | |||||||||||||||||||||
Contingent options recognized as derivative liability | € 87,000,000 | |||||||||||||||||||||
December 15 and 29, 2017 | Convertible Notes | ||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Ordinary shares issued | shares | 6,554,960 | 6,554,960 | ||||||||||||||||||||
Debt principal amount | $ | $ 411 | |||||||||||||||||||||
Accrued interest | $ | $ 37 | |||||||||||||||||||||
Number of Ordinary Shares Outstanding | ||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Number of shares issued and fully paid | shares | 183,901,040 | 167,258,400 | 149,924,000 | 183,901,040 | ||||||||||||||||||
Number of ordinary shares repurchased | shares | 6,427,271 | |||||||||||||||||||||
Other Paid in Capital | December 15 and 29, 2017 | Convertible Notes | ||||||||||||||||||||||
Disclosure Of Classes Of Share Capital [Line Items] | ||||||||||||||||||||||
Convertible notes | € 1,100,000,000 |
Issued Share Capital and Othe_4
Issued Share Capital and Other Reserves - Summary of Other Reserves (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Currency translation | |||
Currency translation, beginning balance | € (7) | € (4) | € 8 |
Currency translation | (6) | (3) | (12) |
Gains reclassified to consolidated statement of operations | (2) | 0 | 0 |
Currency translation, ending balance | (15) | (7) | (4) |
Cash flow hedges | |||
Cash flow hedges, beginning balance | 0 | 0 | 0 |
Gains on fair value that may be subsequently reclassified to consolidated statement of operations | 1 | 0 | 0 |
Gains reclassified to revenue | (5) | 0 | 0 |
Losses reclassified to cost of revenue | 3 | 0 | 0 |
Cash flow hedges, ending balance | (1) | 0 | 0 |
Share-based payments | |||
Share-based payments, beginning balance | 200 | 130 | 77 |
Share-based payments | 88 | 67 | 53 |
Income tax impact associated with share-based payments | 48 | 3 | 0 |
Restricted stock units withheld for employee taxes | (2) | 0 | 0 |
Share-based payments,ending balance | 334 | 200 | 130 |
Other reserves | 875 | 177 | 122 |
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 | (5) | (4) | 0 |
(Losses) gains on fair value that may be subsequently reclassified to consolidated statement of operations | (2) | (2) | (4) |
Losses reclassified to consolidated statement of operations | 2 | 1 | 0 |
Deferred tax on unrealized losses | 1 | 0 | 0 |
Investments, ending balance | (4) | (5) | (4) |
Reserve of gains and losses from investments in equity instruments | |||
Short term and long term investments | |||
Investments, beginning balance | (11) | 0 | 0 |
(Losses) gains on fair value that may be subsequently reclassified to consolidated statement of operations | 720 | (11) | 0 |
Investments, ending balance | 561 | (11) | 0 |
Deferred tax on unrealized gains | € (148) | € 0 | € 0 |
Share-based Payments - Addition
Share-based Payments - Additional Information (Details) € in Millions | 1 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2014shares | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2017EUR (€)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure Of Share Based Payments [Line Items] | |||||||||
Expense from share-based payment transactions with employees | € 88 | € 65 | € 53 | ||||||
Weighted-average contractual life for share options outstanding | 2 years 10 months 24 days | 2 years 10 months 24 days | 3 years 3 months 18 days | 3 years 3 months 18 days | 3 years 4 months 24 days | 3 years 4 months 24 days | |||
Weighted-average share price at exercise for options exercised | $ | $ 152.33 | $ 57.53 | $ 42.05 | ||||||
weighted-average fair value of options granted | $ | $ 39.23 | $ 18.05 | $ 13.10 | ||||||
Increase decrease in expected volatility rate | 10.00% | 10.00% | |||||||
Increase decrease in expected life | one year | one year | |||||||
Employee Share Option Plans ("ESOP") | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Description of share based payment | Under the Employee Share Option Plans (“ESOP”), share options of the Company are granted to executives and certain employees of the Group. For options granted prior to January 1, 2016, the exercise price is equal to the fair value of the shares on grant date for employees in the United States and for U.S. citizens and fair value less 30% for the rest of the world. The value of the discount is included in the grant date fair value of the award. For options granted thereafter, the exercise price of the options is equal to the fair value of the shares on grant date for all employees. Generally, the first vesting period (13.5% – 25% of the initial grant) is up to one year from the grant date and subsequently vests at a rate of 6.25% each quarter until fully vested. The exercise price for options is payable in the EUR value of a fixed USD amount; therefore, the Group considers these awards to be USD-denominated. The options are generally granted with a term of 5 years. | Under the Employee Share Option Plans (“ESOP”), share options of the Company are granted to executives and certain employees of the Group. For options granted prior to January 1, 2016, the exercise price is equal to the fair value of the shares on grant date for employees in the United States and for U.S. citizens and fair value less 30% for the rest of the world. The value of the discount is included in the grant date fair value of the award. For options granted thereafter, the exercise price of the options is equal to the fair value of the shares on grant date for all employees. Generally, the first vesting period (13.5% – 25% of the initial grant) is up to one year from the grant date and subsequently vests at a rate of 6.25% each quarter until fully vested. The exercise price for options is payable in the EUR value of a fixed USD amount; therefore, the Group considers these awards to be USD-denominated. The options are generally granted with a term of 5 years. | |||||||
Description of share based payments award, options exercise price | the exercise price is equal to the fair value of the shares on grant date for employees in the United States and for U.S. citizens and fair value less 30% for the rest of the world. | ||||||||
Options granted period | 5 years | 5 years | |||||||
Employee Share Option Plans ("ESOP") | Vesting Tranche After First Vesting Period | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Vesting percentage | 6.25% | 6.25% | |||||||
Employee Share Option Plans ("ESOP") | Bottom Of Range [Member] | First Vesting Period | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Vesting percentage | 13.50% | 13.50% | |||||||
Employee Share Option Plans ("ESOP") | Top of range | First Vesting Period | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Vesting percentage | 25.00% | 25.00% | |||||||
Restricted Stock Awards | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Expense from share-based payment transactions with employees | € 1 | € 0 | € 0 | ||||||
Restricted Stock Awards | Echo Nest | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Number of shares issued | shares | 158,720 | ||||||||
Vesting period | 2 years | ||||||||
Restricted Stock Awards | 2017 Acquiree | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Number of shares issued | shares | 61,880 | 61,880 | |||||||
Restricted Stock Awards | Bottom Of Range [Member] | 2017 Acquiree | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Vesting period | 2 years | 2 years | |||||||
Restricted Stock Awards | Top of range | 2017 Acquiree | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Vesting period | 3 years | 3 years | |||||||
Restricted Stock Units | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Expense from share-based payment transactions with employees | € 3 | € 6 | € 5 | ||||||
Restricted Stock Units | Bottom Of Range [Member] | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Vesting period | 3 years | ||||||||
Restricted Stock Units | Top of range | |||||||||
Disclosure Of Share Based Payments [Line Items] | |||||||||
Vesting period | 5 years |
Share-based Payments - Schedule
Share-based Payments - Schedule of Activities in RSUs and RSAs Outstanding and Related Information (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | |
Restricted Stock Units | |||
Disclosure Of Share Based Payments [Line Items] | |||
Number of Instruments, Beginning balance | shares | 195,937 | 501,480 | 627,480 |
Instruments Granted | shares | 14,383 | 80,920 | 176,080 |
Instruments Forfeited | shares | (15,991) | (85,903) | (140,000) |
Instruments Released | shares | (93,946) | (300,560) | (162,080) |
Number of Instruments, Ending balance | shares | 100,383 | 195,937 | 501,480 |
Weighted average grant date fair value, Beginning balance | $ | $ 42.46 | $ 36.73 | $ 32.78 |
Weighted average grant date fair value, Granted | $ | 168.24 | 59.63 | 41.85 |
Weighted average grant date fair value, Forfeited | $ | 34.93 | 37.43 | 30.38 |
Weighted average grant date fair value, Released | $ | 40.12 | 38.95 | 32.53 |
Weighted average grant date fair value, Ending balance | $ | $ 63.87 | $ 42.46 | $ 36.73 |
Restricted Stock Awards | |||
Disclosure Of Share Based Payments [Line Items] | |||
Number of Instruments, Beginning balance | shares | 61,880 | 0 | 79,360 |
Instruments Granted | shares | 0 | 61,880 | 0 |
Instruments Forfeited | shares | 0 | 0 | 0 |
Instruments Released | shares | 0 | 0 | (79,360) |
Number of Instruments, Ending balance | shares | 61,880 | 61,880 | 0 |
Weighted average grant date fair value, Beginning balance | $ | $ 90.65 | $ 0 | $ 23.90 |
Weighted average grant date fair value, Granted | $ | 0 | 90.65 | 0 |
Weighted average grant date fair value, Forfeited | $ | 0 | 0 | 0 |
Weighted average grant date fair value, Released | $ | 0 | 0 | 23.90 |
Weighted average grant date fair value, Ending balance | $ | $ 90.65 | $ 90.65 | $ 0 |
Share-based Payments - Schedu_2
Share-based Payments - Schedule of Activity in Share Options Outstanding and Related Information (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | |
Disclosure Of Share Based Payments [Abstract] | |||
Number of options outstanding, beginning balance | shares | 14,646,720 | 10,976,480 | 9,192,120 |
Number of options granted | shares | 3,578,000 | 5,819,520 | 6,020,360 |
Number of options forfeited | shares | (1,220,508) | (659,000) | (512,560) |
Number of options exercised | shares | (4,736,555) | (1,422,520) | (3,661,480) |
Number of options expired | shares | (24,131) | (67,760) | (61,960) |
Number of options outstanding, ending balance | shares | 12,243,526 | 14,646,720 | 10,976,480 |
Number of options, Exercisable | shares | 5,162,876 | 5,822,400 | 3,765,000 |
Weighted average exercise price outstanding, beginning balance | $ | $ 48.73 | $ 36.88 | $ 22.80 |
Weighted average exercise price granted | $ | 142.20 | 64.11 | 41.90 |
Weighted average exercise price forfeited | $ | 62.82 | 46.34 | 36.03 |
Weighted average exercise price exercised | $ | 40.97 | 22.23 | 10.15 |
Weighted average exercise price expired | $ | 54.98 | 28.49 | 20.93 |
Weighted average exercise price outstanding, ending balance | $ | 77.63 | 48.73 | 36.88 |
Weighted average exercise price, Exercisable | $ | $ 58.25 | $ 39.62 | $ 29.98 |
Share-based Payments - Summary
Share-based Payments - Summary of Share Options Outstanding (Detail) | Dec. 31, 2018sharesyr | Dec. 31, 2017sharesyr | Dec. 31, 2016sharesyr | Dec. 31, 2015shares |
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | shares | 12,243,526 | 14,646,720 | 10,976,480 | 9,192,120 |
Weighted average remaining contractual life (years) | yr | 2.9 | 3.3 | 3.4 | |
1.65 to 45.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | shares | 4,753,052 | 9,039,248 | 10,917,960 | |
Weighted average remaining contractual life (years) | yr | 1.8 | 2.7 | 3.5 | |
45.01 to 90.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | shares | 3,337,414 | 4,736,432 | 58,520 | |
Weighted average remaining contractual life (years) | yr | 3.2 | 4.2 | 3.2 | |
90.01 to 135.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | shares | 2,695,890 | 871,040 | ||
Weighted average remaining contractual life (years) | yr | 3.9 | 4.2 | ||
135.01 to 180.00 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | shares | 749,360 | |||
Weighted average remaining contractual life (years) | yr | 4.3 | |||
180.01 to 189.52 | ||||
Disclosure Of Share Based Payments [Line Items] | ||||
Number of options | shares | 707,810 | |||
Weighted average remaining contractual life (years) | yr | 4.2 |
Share-based Payments - Summar_2
Share-based Payments - Summary of Share Options Outstanding (Parenthetical) (Detail) | Dec. 31, 2018USD ($) |
Bottom Of Range [Member] | 1.65 to 45.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | $ 1.65 |
Bottom Of Range [Member] | 45.01 to 90.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 45.01 |
Bottom Of Range [Member] | 90.01 to 135.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 90.01 |
Bottom Of Range [Member] | 135.01 to 180.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 135.01 |
Bottom Of Range [Member] | 180.01 to 189.52 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 180.01 |
Top of range | 1.65 to 45.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 45 |
Top of range | 45.01 to 90.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 90 |
Top of range | 90.01 to 135.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 135 |
Top of range | 135.01 to 180.00 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | 180 |
Top of range | 180.01 to 189.52 | |
Disclosure Of Share Based Payments [Line Items] | |
Weighted average exercise price | $ 189.52 |
Share-based Payments - Summar_3
Share-based Payments - Summary of Black-Scholes Option-Pricing Models (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Bottom Of Range [Member] | |||
Disclosure Of Share Based Payments [Line Items] | |||
Expected volatility (%) | 32.00% | 32.00% | 37.90% |
Risk-free interest rate (%) | 2.40% | 1.40% | 0.80% |
Expected life of share options (years) | 2 years 4 months 24 days | 2 years 4 months 24 days | 2 years 6 months |
Weighted-average share price (US$) | $ 123.13 | $ 50.70 | $ 41.20 |
Top of range | |||
Disclosure Of Share Based Payments [Line Items] | |||
Expected volatility (%) | 34.70% | 43.50% | 45.80% |
Risk-free interest rate (%) | 2.90% | 2.00% | 1.80% |
Expected life of share options (years) | 4 years 4 months 24 days | 4 years 4 months 24 days | 5 years |
Weighted-average share price (US$) | $ 189.52 | $ 90.65 | $ 44.40 |
Share-based Payments - Summar_4
Share-based Payments - Summary of Impact of Changes on Stock Options Expense for Options Granted (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Share Based Payments [Line Items] | |||
Share-based payments | € 88 | € 65 | € 53 |
Volatility Decreased by 10% | |||
Stock option expense increase (decrease) under the following assumption changes | |||
Volatility increase (decrease) by 10% | (11) | ||
Volatility Increase by 10% | |||
Stock option expense increase (decrease) under the following assumption changes | |||
Volatility increase (decrease) by 10% | 11 | ||
Expected Life Decrease by 1 Year | |||
Stock option expense increase (decrease) under the following assumption changes | |||
Expected life decrease by 1 year | (7) | ||
Expected Life Increase by 1 Year | |||
Stock option expense increase (decrease) under the following assumption changes | |||
Expected life decrease by 1 year | 6 | ||
Options Granted in 2018 | |||
Disclosure Of Share Based Payments [Line Items] | |||
Share-based payments | € 46 |
Share-based Payments - Summar_5
Share-based Payments - Summary of Expense Recognized in Consolidated Statement of Operations for Employee Share Based Payments (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Share Based Payments [Line Items] | |||
Cost of revenue | € 3,906 | € 3,241 | € 2,551 |
Research and development | 493 | 396 | 207 |
Sales and marketing | 620 | 567 | 368 |
General and administrative | 283 | 264 | 175 |
Expense From Sharebased Payment Transactions With Employees | 88 | 65 | 53 |
Employee Share-based Payments | |||
Disclosure Of Share Based Payments [Line Items] | |||
Cost of revenue | 3 | 2 | 1 |
Research and development | 40 | 21 | 16 |
Sales and marketing | 19 | 15 | 10 |
General and administrative | 26 | 27 | 26 |
Expense From Sharebased Payment Transactions With Employees | € 88 | € 65 | € 53 |
Convertible Notes and Borrowi_2
Convertible Notes and Borrowings - Additional Information (Details) € in Millions, $ in Millions | Apr. 03, 2018EUR (€) | Dec. 29, 2017USD ($)shares | Dec. 15, 2017USD ($)shares | Apr. 01, 2016USD ($) | Jan. 31, 2018USD ($)shares | Dec. 31, 2018USD ($) | Jan. 01, 2018shares | Nov. 20, 2013shares | Nov. 13, 2012shares |
Disclosure Of Convertible Notes And Borrowings [Abstract] | |||||||||
Principal amount of convertible notes | $ 1,000 | ||||||||
Convertible notes due | 2,021 | ||||||||
Convertible note interest rate | 5.00% | ||||||||
Increase in Payment-in-kind interest rate basis | 1.00% | ||||||||
Discount on conversion price per share | 20.00% | ||||||||
Date of involuntary conversion event | 12 months | ||||||||
Increase in discount rate | 2.50% | ||||||||
Principal amount annualized return | 10.00% | ||||||||
Transaction costs expensed in finance costs | $ 20 | ||||||||
Convertible notes exchanged principal amount | $ 110 | $ 301 | $ 628 | ||||||
Convertible notes accrued interest | $ 10 | $ 27 | |||||||
Ordinary shares issued | shares | 1,754,960 | 4,800,000 | 9,431,960 | 9,431,960 | 8,233,160 | 4,204,120 | |||
Fair value of ordinary shares at exchange | $ 211 | $ 600 | |||||||
Fair value adjusted finance cost | € | € 123 | ||||||||
Issuance of shares upon exchange of Convertible Notes | € | € 1,100 |
Trade and Other Payables - Summ
Trade and Other Payables - Summary of Trade and Other Payables (Details) - EUR (€) € in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Trade And Other Payables [Abstract] | ||
Trade payables | € 295 | € 242 |
Value added tax and sales taxes payable | 118 | 91 |
Other current liabilities | 14 | 8 |
Trade and other payables | € 427 | € 341 |
Trade and Other Payables - Addi
Trade and Other Payables - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 | Dec. 31, 2017 |
Non-current | ||
Deferred rent | € 85 | € 55 |
Other accrued liabilities | 1 | |
Accrued expenses and other liabilities non current | 85 | 56 |
Current | ||
Accrued fees to rights holders | 832 | 639 |
Accrued salaries, vacation, and related taxes | 41 | 34 |
Accrued social costs for options and RSUs | 64 | 87 |
Other accrued expenses | 139 | 121 |
Accrued expenses and other liabilities current | 1,076 | 881 |
Accrued expenses and other liabilities | € 1,161 | € 937 |
Accrued Expenses and Other Li_4
Accrued Expenses and Other Liabilities - Additional Information (Details) € in Millions | 12 Months Ended |
Dec. 31, 2018EUR (€) | |
Disclosure Of Accrued Expenses And Other Liabilities [Abstract] | |
Accrual for fees to rights holders | € 12 |
Provisions - Summary of Changes
Provisions - Summary of Changes in Groups Provisions (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Other Provisions [Line Items] | ||
Beginning balance ,Carrying amount | € 65 | € 61 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 7 | 67 |
Reversal of unutilized amounts | (1) | |
Exchange differences | 3 | (11) |
Utilized | (25) | (51) |
Ending balance ,Carrying amount | 50 | 65 |
Current portion | 42 | 59 |
Non-current portion | 8 | 6 |
Legal Contingencies | ||
Disclosure Of Other Provisions [Line Items] | ||
Beginning balance ,Carrying amount | 53 | 49 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 0 | 60 |
Reversal of unutilized amounts | 0 | |
Exchange differences | 3 | (11) |
Utilized | (17) | (45) |
Ending balance ,Carrying amount | 39 | 53 |
Current portion | 39 | 53 |
Non-current portion | 0 | 0 |
Other Provisions | ||
Disclosure Of Other Provisions [Line Items] | ||
Beginning balance ,Carrying amount | 12 | 12 |
Charged/(credited) to the consolidated statement of operations: | ||
Additional provisions | 7 | 7 |
Reversal of unutilized amounts | (1) | |
Exchange differences | 0 | 0 |
Utilized | (8) | (6) |
Ending balance ,Carrying amount | 11 | 12 |
Current portion | 3 | 6 |
Non-current portion | € 8 | € 6 |
Provisions - Additional Informa
Provisions - Additional Information (Details) | 1 Months Ended |
May 31, 2017USD ($) | |
Disclosure Of Other Provisions [Line Items] | |
Cash payment for litigation settlment | $ 43,000,000 |
Class Counsels Attorneys Fees | 5,000,000 |
Bottom Of Range | |
Disclosure Of Other Provisions [Line Items] | |
Litigation settlement administration and notice costs | 1,000,000 |
Top of Range | |
Disclosure Of Other Provisions [Line Items] | |
Litigation settlement administration and notice costs | $ 2,000,000 |
Financial Risk Management and_3
Financial Risk Management and Financial Instruments - Additional Information (Details) £ in Millions, kr in Millions, $ in Millions | Nov. 05, 2018EUR (€)shares | Apr. 03, 2018EUR (€) | Jul. 13, 2017EUR (€)shares | Jul. 13, 2017USD ($)shares | Oct. 17, 2016EUR (€)shares | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2016EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2018AUD ($) | Dec. 31, 2018GBP (£) | Dec. 31, 2018SEK (kr) | Dec. 31, 2017USD ($) |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Ordinary shares authorized to be repurchased | shares | 10,000,000 | |||||||||||||
Share repurchase program expiry date | Apr. 21, 2021 | Apr. 21, 2021 | ||||||||||||
Percentage of investment in counterparties and instruments | 10.00% | 10.00% | ||||||||||||
Description of cash investment | Investments are subject to credit rating thresholds and at the time of investment, no more than 10% of surplus cash can be invested in any one issuer (excluding certain government bonds and investments in cash management banks) | Investments are subject to credit rating thresholds and at the time of investment, no more than 10% of surplus cash can be invested in any one issuer (excluding certain government bonds and investments in cash management banks) | ||||||||||||
Weighted average maturity description of portfolio | The weighted-average maturity of the portfolio shall not be greater than 2 years, and the final maturity of any investment is not to exceed 5 years. | The weighted-average maturity of the portfolio shall not be greater than 2 years, and the final maturity of any investment is not to exceed 5 years. | ||||||||||||
Short term investments maximum liquidity period | 90 days | 90 days | ||||||||||||
Credit losses on short term investments | € 0 | € 0 | ||||||||||||
Currency strengthening percentage | 10.00% | 10.00% | 10.00% | |||||||||||
Currency weakening percentage | 10.00% | 10.00% | 10.00% | |||||||||||
Closing exchange rate | € 26,000,000 | |||||||||||||
Effect of 10 percentage change in Euro against translation exposure currencies on equity | € 12,000,000 | € 27,000,000 | ||||||||||||
Impact of percentage change in currency exchange on equity | 10.00% | 10.00% | 10.00% | |||||||||||
Increase or decrease in interest rate | 1.00% | 1.00% | 1.00% | |||||||||||
Impact of change in interest rate on interest income | € 8,000,000 | € 8,000,000 | ||||||||||||
Changes in share price percentage | 10.00% | 10.00% | 10.00% | |||||||||||
Impact on the accrual for social costs on outstanding share-based payment awards | € 11,000,000 | € 16,000,000 | ||||||||||||
Gain associated with the changes in fair value of instruments | 8,000,000 | 2,000,000 | ||||||||||||
Transfers between levels | € 0 | 0 | ||||||||||||
Warrants sold to acquire ordinary shares | € 9,000,000 | € 27,000,000 | ||||||||||||
Ordinary shares acquired trough warrants issue | shares | 1,600,000 | 1,600,000 | 5,120,000 | |||||||||||
Exercise price of warrants | $ | $ 89.73 | $ 50.61 | ||||||||||||
Warrant exercise price number of times of fair market value of ordinary shares | 1.3 times | 1.3 times | 1.2 times | 1.2 times | ||||||||||
Expenses recorded within finance costs | € 201,000,000 | 524,000,000 | € 245,000,000 | |||||||||||
Reclassification of convertible notes to other paid in capital within equity | € 1,100,000,000 | |||||||||||||
Tencent Music Entertainment Group | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Changes in share price percentage | 10.00% | 10.00% | ||||||||||||
Non-controlling equity interest percentage | 9.00% | 9.00% | ||||||||||||
Investments transferred from level 3 to level 1 | € 1,630,000,000 | |||||||||||||
Mark to market gains on long term investments | € 720,000,000 | |||||||||||||
Non Designated Hedges | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Notional amount | 25,000,000 | $ 310,000,000 | ||||||||||||
Warrants | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Percentage of increase decrease in ordinary share price | 10.00% | 10.00% | ||||||||||||
Convertible Notes | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Expenses recorded within finance costs | € 123,000,000 | |||||||||||||
Cash Flow Hedges | Foreign Exchange Forwards | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Notional amount | € 968,000,000 | $ 48,000,000 | $ 330 | £ 484 | kr 1,869 | |||||||||
Financial Credit Risk | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Cash and cash equivalents and short term investments | 1,806,000,000 | 1,509,000,000 | ||||||||||||
Bottom Of Range [Member] | Tencent Music Entertainment Group | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Value of the long term investment | 1,467,000,000 | 819,000,000 | ||||||||||||
Bottom Of Range [Member] | Contingent Options | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Value of contingent options | 2,000,000 | |||||||||||||
Bottom Of Range [Member] | Warrants | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Value of warrants | 273,000,000 | 275,000,000 | ||||||||||||
Top of range | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Approved share repurchase amount | € 1,000,000,000 | |||||||||||||
Top of range | Tencent Music Entertainment Group | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Value of the long term investment | 1,793,000,000 | 1,001,000,000 | ||||||||||||
Top of range | Contingent Options | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Value of contingent options | 4,000,000 | |||||||||||||
Top of range | Warrants | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Value of warrants | € 399,000,000 | € 403,000,000 | ||||||||||||
Top of range | Cash Flow Hedges | ||||||||||||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | ||||||||||||||
Maximum headging period | 13 months | 13 months | ||||||||||||
Foreign exchange forward contract heading term | 1 year | 1 year |
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, 2018 | Dec. 31, 2017 |
Disclosure Of Liquidity Risk [Line Items] | ||
Short term investments | € 915 | € 1,032 |
Liquidity Position | ||
Disclosure Of Liquidity Risk [Line Items] | ||
Short term investments | 915 | 1,032 |
Short term deposits | 307 | 122 |
Cash at bank and on hand | 584 | 355 |
Total surplus liquidity | 1,806 | 1,509 |
Liquidity position | € 1,806 | € 1,509 |
Financial Risk Management and_5
Financial Risk Management and Financial Instruments - Summary of Immediate Impact on Net Loss Before Tax (Details) € in Millions, £ in Millions, $ in Millions, $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2018AUD ($) | Dec. 31, 2018GBP (£) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) | Dec. 31, 2017AUD ($) | Dec. 31, 2017GBP (£) | |
Disclosure Of Financial Instruments [Abstract] | ||||||||
(Increase)/decrease in loss before tax | € (3) | $ 74 | $ 7 | £ 3 | € 2 | $ 9 | $ 5 | £ (2) |
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) - Dec. 31, 2018 - Cash Flow Hedges - Foreign Exchange Forwards € in Millions, £ in Millions, kr in Millions, $ in Millions, $ in Millions | EUR (€) | USD ($) | AUD ($) | GBP (£) | SEK (kr) |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||||
Notional amount in foreign currency | € 968 | $ 48 | $ 330 | £ 484 | kr 1,869 |
Revenue | |||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||||
Notional amount in foreign currency | 27 | 187 | 282 | 1,112 | |
Cost of Revenue | |||||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||||
Notional amount in foreign currency | $ 21 | $ 143 | £ 202 | kr 757 |
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, 2018 | Dec. 31, 2017 |
Financial assets at fair value | ||
Total financial assets at fair value by level | € 2,569 | € 1,950 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 339 | 1,298 |
Convertible Notes | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 944 | |
Derivatives (Designated for Hedging) | Foreign Exchange Forwards | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 6 | 5 |
Derivatives (Not Designated for Hedging) | Warrants | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 333 | 346 |
Derivatives (Not Designated for Hedging) | Contingent Options | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 3 | |
Foreign Exchange Forwards | Derivatives (Designated for Hedging) | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 6 | 6 |
Foreign Exchange Forwards | Derivatives (Not Designated for Hedging) | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 2 | |
Short Term Investments | Government Securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 221 | 244 |
Short Term Investments | Agency Securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 7 | 7 |
Short Term Investments | Corporate Notes | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 343 | 330 |
Short Term Investments | Collateralized Reverse Purchase Agreements | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 344 | 451 |
Other | Derivatives (Not Designated for Hedging) | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 2 | |
Long Term Investment | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 1,646 | 910 |
Level 1 | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 1,794 | 206 |
Level 1 | Short Term Investments | Government Securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 164 | 206 |
Level 1 | Long Term Investment | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 1,630 | |
Level 2 | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 757 | 834 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 6 | 5 |
Level 2 | Derivatives (Designated for Hedging) | Foreign Exchange Forwards | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 6 | 5 |
Level 2 | Foreign Exchange Forwards | Derivatives (Designated for Hedging) | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 6 | 6 |
Level 2 | Foreign Exchange Forwards | Derivatives (Not Designated for Hedging) | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 2 | |
Level 2 | Short Term Investments | Government Securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 57 | 38 |
Level 2 | Short Term Investments | Agency Securities | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 7 | 7 |
Level 2 | Short Term Investments | Corporate Notes | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 343 | 330 |
Level 2 | Short Term Investments | Collateralized Reverse Purchase Agreements | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 344 | 451 |
Level 3 | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 18 | 910 |
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 333 | 1,293 |
Level 3 | Convertible Notes | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 944 | |
Level 3 | Derivatives (Not Designated for Hedging) | Warrants | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 333 | 346 |
Level 3 | Derivatives (Not Designated for Hedging) | Contingent Options | ||
Financial liabilities at fair value | ||
Total financial liabilities at fair value by level | 3 | |
Level 3 | Other | Derivatives (Not Designated for Hedging) | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | 2 | |
Level 3 | Long Term Investment | ||
Financial assets at fair value | ||
Total financial assets at fair value by level | € 16 | € 910 |
Financial Risk Management and_8
Financial Risk Management and Financial Instruments - Summary of Changes in Long Term Investments (Details) - EUR (€) € in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Financial Instruments [Abstract] | ||
At January 1 | € 910 | |
Equity issued in exchange for long term investment | € 910 | |
Changes in fair value recorded in other comprehensive loss | 720 | |
Purchase of investment | 16 | |
At December 31 | € 1,646 | € 910 |
Financial Risk Management and_9
Financial Risk Management and Financial Instruments - Summary of Weightings Applied to Valuation Method (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
PWERM | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 50.00% | ||
Secondary Market Transactions | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 50.00% | ||
Bottom Of Range [Member] | PWERM | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 50.00% | 80.00% | |
Bottom Of Range [Member] | Secondary Market Transactions | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 20.00% | 0.00% | |
Top of range | PWERM | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 80.00% | 100.00% | |
Top of range | Secondary Market Transactions | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 50.00% | 20.00% |
Financial Risk Management an_10
Financial Risk Management and Financial Instruments - Summary of PWERM Valuations (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Market Approach Under PWERM | Low Case Public Company | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 35.00% | ||
Market Approach Under PWERM | High Case Transaction | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 4.00% | ||
Market Approach Under PWERM | Low Case Transaction | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 6.00% | ||
Market Approach Under PWERM | Bottom Of Range [Member] | High Case Public Company | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 55.00% | 25.00% | 20.00% |
Market Approach Under PWERM | Bottom Of Range [Member] | Low Case Public Company | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 28.00% | 35.00% | |
Market Approach Under PWERM | Bottom Of Range [Member] | High Case Transaction | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 0.00% | 4.00% | |
Market Approach Under PWERM | Bottom Of Range [Member] | Low Case Transaction | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 0.00% | 4.00% | |
Market Approach Under PWERM | Top of range | High Case Public Company | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 70.00% | 40.00% | 25.00% |
Market Approach Under PWERM | Top of range | Low Case Public Company | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 35.00% | 40.00% | |
Market Approach Under PWERM | Top of range | High Case Transaction | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 3.00% | 6.00% | |
Market Approach Under PWERM | Top of range | Low Case Transaction | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 2.00% | 6.00% | |
Income and Market Approaches Under PWERM | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 30.00% | ||
Income and Market Approaches Under PWERM | Bottom Of Range [Member] | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 2.00% | 5.00% | |
Income and Market Approaches Under PWERM | Top of range | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Percentage of weightings | 5.00% | 30.00% |
Financial Risk Management an_11
Financial Risk Management and Financial Instruments - Summary of Key Assumptions Used to Estimate Fair Value of Ordinary Shares and Contingent Options Using PWERM (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Revenue multiple used to estimate enterprise value | 3 | ||
Discount rate (%) | 13.00% | ||
Bottom Of Range [Member] | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Revenue multiple used to estimate enterprise value | 2.2 | 2 | |
Discount rate (%) | 13.00% | 14.00% | |
Volatility (%) | 32.50% | 30.00% | 35.00% |
Top of range | |||
Disclosure Of Financial Risk Management And Financial Instruments [Line Items] | |||
Revenue multiple used to estimate enterprise value | 4.6 | 3.5 | |
Discount rate (%) | 19.50% | 19.50% | |
Volatility (%) | 35.00% | 37.50% | 47.50% |
Financial Risk Management an_12
Financial Risk Management and Financial Instruments - Summary of Changes in Contingent Options Liability (Details) - Contingent Options Liability - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Financial Instruments [Line Items] | |||
At January 1 | € 3 | € 100 | € 82 |
(Gain)/loss recognized in profit or loss | € (3) | (97) | 18 |
At December 31 | € 3 | € 100 |
Financial Risk Management an_13
Financial Risk Management and Financial Instruments - Summary of Assumption Used to Estimate Fair Value of Warrants (Details) - Warrants | 12 Months Ended | ||
Dec. 31, 2018USD ($)yr | Dec. 31, 2017USD ($)yr | Dec. 31, 2016USD ($)yr | |
Bottom Of Range [Member] | |||
Disclosure Of Significant Unobservable Inputs Used In Fair Value Measurement Of Liabilities [Line Items] | |||
Expected term (years) | yr | 0.6 | 0.9 | 1.85 |
Risk free rate (%) | 1.98% | 1.17% | 0.77% |
Volatility (%) | 32.50% | 30.00% | 35.00% |
Share price (US$) | $ | $ 113.50 | $ 50.70 | $ 42.18 |
Top of range | |||
Disclosure Of Significant Unobservable Inputs Used In Fair Value Measurement Of Liabilities [Line Items] | |||
Expected term (years) | yr | 1.71 | 1.6 | 2.09 |
Risk free rate (%) | 2.73% | 1.76% | 1.14% |
Volatility (%) | 40.00% | 37.50% | 37.50% |
Share price (US$) | $ | $ 180.83 | $ 120.50 | $ 44.40 |
Financial Risk Management an_14
Financial Risk Management and Financial Instruments - Summary of Changes in Warrants Liability (Details) - Warrants - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Changes In Warrants Liability [Line Items] | |||
Beginning balance | € 346 | € 34 | |
Issuance of warrant for cash | 9 | € 27 | |
Non cash changes in profit or loss | |||
Changes in fair value | (39) | 313 | 7 |
Effect of changes in foreign exchange rates | 26 | (10) | |
Ending balance | € 333 | € 346 | € 34 |
Financial Risk Management an_15
Financial Risk Management and Financial Instruments - Summary of Changes in Convertible Notes (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Financial Instruments [Abstract] | |||
Beginning balance | € 944 | € 1,106 | |
Loan financing transaction - Convertible Notes | € 861 | ||
Changes in fair value | 221 | 666 | 166 |
Effect of changes in foreign exchange rates | (20) | (142) | 79 |
Issuance of shares upon exchange of Convertible Notes | (1,145) | (686) | |
Ending balance | € 0 | € 944 | € 1,106 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancellable Operating Leases (Details) - EUR (€) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure Of Finance Lease And Operating Lease By Lessee [Line Items] | |||
Minimum lease payments under non-cancellable operating leases | € 833,000,000 | € 769,000,000 | € 212,000,000 |
Not Later Than One Year | |||
Disclosure Of Finance Lease And Operating Lease By Lessee [Line Items] | |||
Minimum lease payments under non-cancellable operating leases | 62,000,000 | 47,000,000 | 25,000,000 |
Later Than One Year But Not More Than 5 Years | |||
Disclosure Of Finance Lease And Operating Lease By Lessee [Line Items] | |||
Minimum lease payments under non-cancellable operating leases | 288,000,000 | 244,000,000 | 97,000,000 |
Later Than Five Years | |||
Disclosure Of Finance Lease And Operating Lease By Lessee [Line Items] | |||
Minimum lease payments under non-cancellable operating leases | € 483,000,000 | € 478,000,000 | € 90,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Details) € in Millions | 12 Months Ended | ||
Dec. 31, 2018EUR (€)Lawsuit | Dec. 31, 2017EUR (€) | Dec. 31, 2016EUR (€) | |
Commitments And Contingencies [Line Items] | |||
Lease expenses | € 79 | € 52 | € 19 |
Number of lawsuits on alleging unlawful practices | Lawsuit | 6 | ||
Commitments And Contingencies [Line Items] | |||
Minimum Spend Commitments Under Service Agreement | € 270 | ||
Service Agreement Term | 2 years |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Minimum Royalty Payments Associated With License Agreements (Details) - EUR (€) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure Of Minimum Royalty Payments Associated With License Agreements [Line Items] | |||
Minimum royalty payments associated with license agreements | € 700,000,000 | € 1,695,000,000 | € 40,000,000 |
Not Later Than One Year | |||
Disclosure Of Minimum Royalty Payments Associated With License Agreements [Line Items] | |||
Minimum royalty payments associated with license agreements | 548,000,000 | 1,060,000,000 | 26,000,000 |
Later Than One Year But Not More Than 5 Years | |||
Disclosure Of Minimum Royalty Payments Associated With License Agreements [Line Items] | |||
Minimum royalty payments associated with license agreements | € 152,000,000 | € 635,000,000 | € 14,000,000 |
Related Party Transaction - Sum
Related Party Transaction - Summary of Related Party Transactions (Details) - EUR (€) € in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Key management compensation | |||
Short term employee benefits | € 4 | € 4 | € 4 |
Share-based payments | 19 | 17 | 18 |
Post-employment benefits | 0 | 0 | 1 |
Termination benefits | 1 | 1 | 1 |
Total key management compensation | € 24 | € 22 | € 24 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) € in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | Dec. 31, 2016EUR (€) | Apr. 01, 2016USD ($) | |
Rivers Cross Trust | ||||
Disclosure Of Transactions Between Related Parties [Line Items] | ||||
Convertible Notes issued and sold | $ | $ 0.2 | |||
Soundtrack Your Brand Sweden AB | ||||
Disclosure Of Transactions Between Related Parties [Line Items] | ||||
Notional amount | € | € 3 | € 3 | € 2 |
Group Information - Summary of
Group Information - Summary of Company's Principal Subsidiaries (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Spotify AB | Sweden | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify AB |
Principal activities | Main operating company |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Sweden |
Spotify USA Inc. | USA | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify USA Inc. |
Principal activities | USA operating company |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | USA |
Spotify Ltd | UK | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Ltd |
Principal activities | Sales, marketing, contract research and development, and customer support |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | UK |
Spotify Norway AS | Norway | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Norway AS |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Norway |
Spotify Spain S.L. | Spain | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Spain S.L. |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Spain |
Spotify GmbH | Germany | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify GmbH |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Germany |
Spotify France SAS | France | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify France SAS |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | France |
Spotify Netherlands B.V. | Netherlands | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Netherlands B.V. |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Netherlands |
Spotify Canada Inc. | Canada | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Canada Inc. |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Canada |
Spotify Australia Pty Ltd | Australia | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Australia Pty Ltd |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Australia |
Spotify Brasil Serviços De Música LTDA | Brazil | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Brasil Serviços De Música LTDA |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Brazil |
Spotify Japan K.K | Japan | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Japan K.K |
Principal activities | Sales and marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Japan |
Spotify Singapore Pte Ltd. | Singapore | |
Disclosure Of Significant Investments In Subsidiaries [Line Items] | |
Name | Spotify Singapore Pte Ltd. |
Principal activities | Marketing |
Proportion of voting rights and shares held (directly or indirectly) | 100.00% |
Country of incorporation | Singapore |
Events After the Reporting Pe_2
Events After the Reporting Period - Additional Information (Details) - EUR (€) € in Millions | 1 Months Ended | 12 Months Ended | |||
Feb. 08, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 12, 2019 | |
Disclosure Of Nonadjusting Events After Reporting Period [Line Items] | |||||
Repurchases of ordinary shares, Shares | 6,427,271 | 0 | 0 | ||
Repurchases of ordinary shares | € 77 | ||||
Major Ordinary Share Transactions | |||||
Disclosure Of Nonadjusting Events After Reporting Period [Line Items] | |||||
Repurchases of ordinary shares, Shares | 548,121 | ||||
Repurchases of ordinary shares | € 62 | ||||
Major business combination | Gimlet Media Inc. and Anchor FM Inc | |||||
Disclosure Of Nonadjusting Events After Reporting Period [Line Items] | |||||
Total purchase consideration | € 300 |