Spotify Technology S.A. (NYSE:SPOT) today reported financial
results for the fourth fiscal quarter of 2020 ending December 31,
2020.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210203005304/en/
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Dear Shareholders,
We ended 2020 with strong Q4 performance as the business
delivered substantial MAU growth, subscriber additions that
exceeded our guidance, an improvement in ARPU trends, acceleration
of users who engage with podcast content, better than expected
Gross Margin, and Free Cash Flow of €74 million. Headwinds included
the negative effects from FX movements, which were more severe than
forecast and impacted revenue growth by 690 bps. Given the strong
Q4 performance, we believe we are well positioned for continued
growth in 2021.
MONTHLY ACTIVE USERS (“MAUs”)
Total MAUs grew 27% Y/Y to 345 million in the quarter, reaching
the top end of our guidance range. We continued to see healthy
double digit Y/Y growth across all regions. For the full year, net
additions accelerated to a record 74 million compared to 2019 net
additions of 64 million. In Q4, we added 25 million MAUs and
benefited from faster growth in India, US, and Western Europe, with
India serving as a notable source of upside vs. our forecast driven
by successful marketing campaigns. Based on the behavior we see
when users first join Spotify, we are confident that podcast usage
has been a factor in the accelerated net additions.
On December 2, 2020, we launched the 6th annual year-end Spotify
Wrapped campaign. This year focused on engaging new audiences by
demonstrating the power of listening to connect, celebrating and
supporting our creator communities in a meaningful way, and
evolving Wrapped to deliver a more purposeful and personal
experience for our users. Within the first 24 hours of launch, the
campaign exceeded the total engagement numbers for all of 2019. In
total, more than 90 million users engaged with Wrapped content this
year (vs. more than 60 million last year). This spurred more than
50 million shares of Wrapped stories and cards and a considerable
amount of platform consumption on our three personalized playlists,
with the latter driving 8% of total consumption hours on December
3, the day after launch.
Global consumption hours were up meaningfully in Q4 on a Y/Y
basis. We have seen per user consumption in large regions such as
Europe and North America return to growth, while Latin America and
Rest of World show signs of improvement but remain slightly below
pre-COVID levels.
PREMIUM SUBSCRIBERS
Our Premium Subscribers grew 24% Y/Y to 155 million in the
quarter, exceeding the top end of our guidance range. For the full
year, net additions accelerated to a record 30 million compared to
2019 net additions of 28 million. In Q4, we added 10 million
subscribers, with all regions contributing to growth, led by Europe
and North America. Europe continues to benefit from our July launch
in Russia and 12 surrounding markets. Relative to our forecast,
Latin America and Europe performed particularly well from a
regional perspective, while Family Plan and Duo additions were
strong from a product perspective.
Of note this quarter was the launch of Spotify Premium Mini in
India and Indonesia, which gives users daily and weekly access to a
subset of their favorite Premium features for a lower price as part
of Spotify’s commitment to continuously explore new ways to improve
our Premium experience. In Q4, we also announced partnership deals
with Grab (Southeast Asia), Flipkart (India), Tink (Germany), and
Euronics (Europe). On February 1, we announced that Spotify is now
officially available in South Korea, the world's 6th largest music
market.
Our average monthly Premium churn rate for the quarter was down
slightly Y/Y and up modestly Q/Q. This was in line with
expectations with the sequential increase due to churn from
promotional plans. We expect churn to continue to decline in
2021.
FINANCIAL METRICS
Revenue
Total revenue of €2,168 million grew 17% Y/Y in Q4 or 24% Y/Y on
a constant currency basis. Reported revenue was slightly above the
midpoint of our guidance range, as FX headwinds of 690 bps were
higher than the 600 bps incorporated into our plan. Excluding these
headwinds we were slightly above plan. The depreciation of the US
Dollar vs. the Euro was the primary driver of this variance.
Premium revenue grew 15% Y/Y to €1,887 million (or 22% Y/Y in
constant currency terms) while Ad-Supported revenue was
particularly strong, growing 29% Y/Y (or 39% Y/Y in constant
currency terms).
Within Premium, average revenue per user (“ARPU”) of €4.26 in Q4
was down 8% Y/Y (but down only 3% Y/Y in constant currency terms
vs. down 6% Y/Y in Q3). Excluding FX, product mix accounted for the
majority of the ARPU decline, followed by geographic mix, but was
partially offset by reduced promotional activity. In October, we
raised the price of the Family Plan in 7 markets (Australia,
Belgium, Switzerland, Bolivia, Peru, Ecuador, and Colombia)
alongside Duo in Colombia. Early results of the price increases
have been highly encouraging, as we have seen no meaningful impacts
to churn or customer intake in these markets. On February 1, we
announced Family Plan price increases across an additional 25
markets (8 in Latin America, 12 in Europe, 4 in Rest of World and
Canada in North America), including full portfolio price increases
in Sweden, Norway, Finland, and Iceland. We expect continued
sequential improvement in the Y/Y change in Premium ARPU in 2021 on
a constant currency basis.
Ad-Supported revenue of €281 million outperformed our forecast.
We saw strong Y/Y revenue growth across all of our regions and
channels as advertiser demand continued to rebound from Q2 2020
lows. The strength in Ad-Supported revenue was led by our Podcast,
Direct, and Ad Studio channels, with Podcast and Ad Studio both
growing over 100% on a Y/Y basis. Podcast performance benefited
from strong underlying demand from advertisers with a 50% increase
in the number of companies spending in this channel vs. Q3. We saw
healthy double digit CPM gains, along with contributions from The
Ringer, The Joe Rogan Experience, and the acquisition of Megaphone
(closed on December 8th). Streaming Ad Insertion (“SAI”), our
targeted, impression-based podcast ad product, is now live across
most of our Owned & Exclusive (“O&E”) portfolio and
available in four markets (US, Canada, UK and Germany). Our
Programmatic and Direct channels increased 12% and 7% Y/Y,
respectively, due to a significant increase in impressions
sold.
Gross Margin
Gross Margin finished at 26.5% in Q4, above the top end of our
guidance range. Our Gross Margin expanded nearly 100 bps Y/Y, as
Other Cost of Revenue efficiencies (e.g. payment fees, streaming
delivery costs), a favorable revenue mix shift towards podcasts,
and a change in estimated music royalties were partially offset by
higher non-music and other content costs.
Premium Gross Margin was 28.9% in Q4, up from 27.3% in Q3 and up
145 bps Y/Y. Ad-Supported Gross Margin was 10.8% in Q4, up from
0.6% in Q3 and down 84 bps Y/Y. As a reminder, we now account for
all content costs related to podcast investment in the Ad-Supported
business.
Operating Expenses / Income (Loss)
Operating Expenses totaled €644 million in Q4, an increase of
17% Y/Y and above our plan. Higher than forecast Social Charges
accounted for the overage given the increase in our share price
during the quarter. Total Social Charges were €65 million,
approximately €56 million higher than forecast. Excluding the
impact of our share price volatility, Operating Expenses grew less
than forecast at 7% Y/Y. Additionally, certain marketing expenses
came in lower than expected due to campaign timing shifts and
movements in FX.
As a reminder, Social Charges are payroll taxes associated with
employee salaries and benefits, including share-based compensation.
We are subject to social taxes in several countries in which we
operate, although Sweden accounts for the bulk of the social costs.
We don’t forecast stock price changes in our guidance so upward or
downward movements will impact our reported operating expenses.
At the end of Q4, our workforce consisted of 6,554 FTEs
globally.
Product and Platform
We continue to lean into our ubiquity strategy, launching
increased podcast support on connected Google and Alexa devices
during the quarter. All Spotify users can now play and control
podcasts through their Google Assistant-enabled device in English
globally. Spotify is also now integrated into the PlayStation 5 and
Xbox Series X|S gaming consoles, with the former featuring a
dedicated Spotify button on the new media controller.
With all of the new content available on Spotify, we are
continually making enhancements to the Home Tab to improve
discovery and activation of content. In Q4, we launched our
first-ever mixed-media morning show, The Get Up, in the US, where
listeners get the best of both worlds with music and news.
Additionally, Spotify users everywhere can now upload custom covers
and descriptions to their homemade playlists using their mobile
phones.
Content
We continue to lean into our goal of becoming the world’s number
one audio platform through compelling new music and exclusive
non-music content. As of Q4, we had 2.2 million podcasts on the
platform (up from more than 1.9 million podcasts in Q3). Of note,
25% of our Total MAUs engaged with podcast content in Q4 (up from
22% of MAUs in Q3 2020). We continue to see strong growth in
podcast consumption, with consumption hours in Q4 nearly doubling
since Q4 2019. We have increasing conviction in the causal
relationship between the growth in podcast consumption driving
higher LTV and retention among our user base.
In an effort to grow audio monetization across the industry, we
acquired Megaphone on December 8. Megaphone is one of the world’s
most innovative platforms for enterprise podcast hosting and
monetization. With this acquisition, we have the ability over time
to make SAI technology available to third-party publishers on
Spotify while growing our pool of targetable podcast inventory for
advertisers.
In December, The Joe Rogan Experience became exclusive to
Spotify, driving a meaningful uptick in audience for the show on
our platform. As of year-end, The Joe Rogan Experience was the #1
podcast on our platform in 17 markets. While it remains early days,
we are very encouraged by the performance of this content since its
arrival on our platform, as it has stimulated new user additions,
activated first time podcast listeners, and driven favorable
engagement trends, including vodcast consumption. We also announced
a new multiyear partnership with The Duke and Duchess of Sussex’s
Archewell Audio. We were pleased with the performance of The Duke
and Duchess of Sussex’s holiday special episode that was released
on our platform in December 2020 and look forward to a full scale
launch of shows coming in 2021.
Other notable Q4 content launches in the US included Dare to
Lead with Brene Brown (Parcast), 10 Songs that Made Me (Spotify
Studios), The Ringer Music Show (The Ringer), and The Get Up
Morning Show (Gimlet). Internationally, we released 57 new Original
& Exclusive (“O&E”) podcasts. Select launches included Caso
63, our first Original in Chile and ranked as one of the biggest
fiction shows ever launched on the platform, as well as our first
podcast in Telugu, Lifetime NTR (India), and 123 Segundos in
partnership with BandNews (Brazil). We also signed 6 podcasts
exclusively to our creator support program in Indonesia.
On the music front, key Q4 releases included Bad Bunny’s album,
El Último Tour Del Mundo, Paul McCartney’s album, McCartney III,
and more from the likes of Dolly Parton to Ariana Grande. Bad
Bunny’s album was the first Spanish-language release to top the
Billboard 200 chart in its 64-year history and, thanks to
far-reaching international support across 24 markets, Spotify
helped drive the Puerto Rican artist to historic heights. With the
drop of Paul McCartney’s album, fans were given the opportunity to
purchase a limited edition color vinyl, exclusive to Spotify
users.
Two-Sided Marketplace
Our Sponsored Recommendations have continued a strong pace of
growth, with December marking the single biggest month ever. During
the quarter, we saw more than a 50% increase in the number of
campaigns vs. the prior quarter. Additionally, over half of the
customers in Q4 were new buyers, which helped drive an 82% increase
in billings from the prior quarter. Notable campaigns included
number one albums, El Último Tour Del Mundo by Bad Bunny and
evermore by Taylor Swift, as well as Welcome to O’Block by King Von
and Pegasus by Trippie Redd.
We continue to add new features for the creator community and
have seen a large increase in the number of artists and their teams
using Spotify for Artists. This quarter, we expanded access to our
popular feature, Canvas, which had been in limited beta. With
Canvas, artists can upload short looping visuals to each of their
tracks through Spotify for Artists, and in the first month since
expanding access, over 180,000 artists used this tool. Canvas gives
artists a powerful new way to develop fans on Spotify, and we have
found that when listeners see a Canvas they are more likely to keep
streaming (+5% on average vs. control group) or even share and save
the track.
During December, we launched our annual Wrapped for Artists
campaign, empowering artists around the world to reflect on and
celebrate their year of growth on Spotify. Our 2020 Wrapped for
Artists reached new heights, with over a 60% increase in peak
engagement vs. 2019. We had our largest Wrapped for Artists of all
time, with artists from over 200 countries around the world and
more than 3 million visits to our microsite.
As part of our ongoing investments to elevate and support the
songwriting community, in December, we rolled out the Songwriters
Hub in Spotify — the new destination for fans and collaborators to
explore their next favorite songwriter or producer. In the hub,
visitors can find Written By playlists from both established and
emerging songwriters, listen to podcasts about the craft of
songwriting, and discover a rotating cast of featured songwriters
and cultural moments each month. In our continued effort to connect
fans to listeners, we debuted Weekly Music Charts for songs and
albums in 46 new markets.
Free Cash Flow
Free Cash Flow was €74 million in Q4, a €95 million decrease Y/Y
as the prior year included a favorable working capital benefit due
to a shift in timing for select licensor payments while Q4 2020
included higher podcast-related payments. These decreases were
partially offset by a decrease in net loss adjusted for non-cash
items.
In addition to the positive Free Cash Flow dynamics, we maintain
a strong liquidity position and are confident in the financial
position of the business. At the end of Q4, we had €1.8 billion in
cash and cash equivalents, restricted cash, and short term
investments and no indebtedness1.
2021 OUTLOOK
In 2020, we believe the pandemic had little impact on our
subscriber growth and may have actually contributed positively to
pulling forward new signups. From a revenue standpoint, advertising
was negatively affected in the back half of Q1 and persisted
throughout the rest of the year. Looking ahead, we are optimistic
about the underlying trends in the business into 2021 and beyond,
however, we face increased forecasting uncertainty versus prior
years due to the unknown duration of the pandemic and its ongoing
effect on user, subscriber, and revenue growth.
The following forward-looking statements reflect Spotify’s
expectations as of February 3, 2021 and are subject to substantial
uncertainty. The estimates below utilize the same methodology we’ve
used in prior quarters with respect to our guidance and the
potential range of outcomes. Given the extraordinary operating
circumstances we currently face with respect to the impact of
COVID-19 there is a greater likelihood of variances within those
ranges than typical quarters.
Q1 2021 Guidance:
- Total MAUs: 354-364 million
- Total Premium Subscribers: 155-158 million
- Total Revenue: €1.99-€2.19 billion
- Assumes approximately 770 bps headwind to growth Y/Y due to
movements in foreign exchange rates
- Gross Margin: 23.5-25.5%
- Operating Profit/Loss: €(78)-€(28) million
Full Year 2021 Guidance:
- Total MAUs: 407-427 million
- Total Premium Subscribers: 172-184 million
- Total Revenue: €9.01-€9.41 billion
- Assumes approximately 370 bps headwind to growth Y/Y due to
movements in foreign exchange rates
- Gross Margin: 23.7-25.7%
- Operating Profit/Loss: €(300)-€(200) million
EARNINGS QUESTION & ANSWER SESSION
We will host a live question and answer session starting at 8
a.m. ET today on investors.spotify.com. Daniel Ek, our Founder and
CEO, and Paul Vogel, our Chief Financial Officer, will be on hand
to answer questions submitted through slido.com using the event
code #SpotifyEarningsQ420. Participants also may join using
the listen-only conference line by registering through the
following site:
Direct Event Registration Portal:
http://www.directeventreg.com/registration/event/5373637
We use investors.spotify.com and newsroom.spotify.com websites
as well as other social media listed in the “Resources – Social
Media” tab of our Investors website to disclose material company
information.
STREAM ON
Spotify will be hosting a virtual event — Stream On — on Monday,
Feb 22 to share the latest on the state of global audio streaming
and where it's headed in the future. The event will be
live-streamed and will include a number of speakers. This event is
open to all, and we'll be sharing additional details very soon.
We use investors.spotify.com and newsroom.spotify.com websites
as well as other social media listed in the “Resources – Social
Media” tab of our Investors website to disclose material company
information.
Use of Non-IFRS Measures
To supplement our financial information presented in accordance
with IFRS, we use the following non-IFRS financial measures:
Revenue excluding foreign exchange effect, Premium revenue
excluding foreign exchange effect, Ad-Supported revenue excluding
foreign exchange effect, and Free Cash Flow. Management believes
that Revenue excluding foreign exchange effect, Premium revenue
excluding foreign exchange effect and Ad-Supported revenue
excluding foreign exchange effect are useful to investors because
they present measures that facilitate comparison to our historical
performance. However, Revenue excluding foreign exchange effect,
Premium revenue excluding foreign exchange effect and Ad-Supported
revenue excluding foreign exchange effect should be considered in
addition to, not as a substitute for or superior to, Revenue,
Premium revenue, Ad-Supported revenue or other financial measures
prepared in accordance with IFRS. Management believes that Free
Cash Flow is useful to investors because it presents a measure that
approximates the amount of cash generated that is available to
repay debt obligations, to make investments, and for certain other
activities that exclude certain infrequently occurring and/or
non-cash items. However, Free Cash Flow should be considered in
addition to, not as a substitute for or superior to, net cash flows
(used in)/from operating activities or other financial measures
prepared in accordance with IFRS. For more information on these
non-IFRS financial measures, please see “Reconciliation of IFRS to
Non-IFRS Results” table.
Forward Looking Statements
This shareholder letter contains estimates and forward-looking
statements. All statements other than statements of historical fact
are forward-looking statements. The words “may,” “might,” “will,”
“could,” “would,” “should,” “expect,” “plan,” “anticipate,”
“intend,” “seek,” “believe,” “estimate,” “predict,” “potential,”
“continue,” “contemplate,” “possible,” and similar words are
intended to identify estimates and forward-looking statements.
Our estimates and forward-looking statements are mainly based on
our current expectations and estimates of future events and trends,
which affect or may affect our businesses and operations. Although
we believe that these estimates and forward-looking statements are
based upon reasonable assumptions, they are subject to numerous
risks and uncertainties and are made in light of information
currently available to us. Many important factors may adversely
affect our results as indicated in forward-looking statements.
These factors include, but are not limited to: our ability to
attract prospective users and to retain existing users; competition
for users, user listening time, and advertisers; risks associated
with our international expansion and our ability to manage our
growth; our ability to predict, recommend, and play content that
our users enjoy; our ability to effectively monetize our Service;
our ability to generate sufficient revenue to be profitable or to
generate positive cash flow and grow on a sustained basis; risks
associated with the expansion of our operations to deliver
non-music content, including podcasts, including increased
business, legal, financial, reputational, and competitive risks;
potential disputes or liabilities associated with content made
available on our Service; risks relating to the acquisition,
investment, and disposition of companies or technologies; our
dependence upon third-party licenses for most of the content we
stream; our lack of control over the providers of our content and
their effect on our access to music and other content; our ability
to comply with the many complex license agreements to which we are
a party; our ability to accurately estimate the amounts payable
under our license agreements; the limitations on our operating
flexibility due to the minimum guarantees required under certain of
our license agreements; our ability to obtain accurate and
comprehensive information about the compositions embodied in sound
recordings in order to obtain necessary licenses or perform
obligations under our existing license agreements; new copyright
legislation and related regulations that may increase the cost
and/or difficulty of music licensing; assertions by third parties
of infringement or other violations by us of their intellectual
property rights; our ability to protect our intellectual property;
the dependence of streaming on operating systems, online platforms,
hardware, networks, regulations, and standards that we do not
control; potential breaches of our security systems; interruptions,
delays, or discontinuations in service in our systems or systems of
third parties; changes in laws or regulations affecting us; risks
relating to privacy and data security; our ability to maintain,
protect, and enhance our brand; payment-related risks; our ability
to hire and retain key personnel; our ability to accurately
estimate our user metrics and other estimates; risks associated
with manipulation of stream counts and user accounts and
unauthorized access to our services; tax-related risks; the
concentration of voting power among our founders who have and will
continue to have substantial control over our business; risks
related to our status as a foreign private issuer; international,
national or local economic, social or political conditions; risks
associated with accounting estimates, currency fluctuations and
foreign exchange controls; and the impact of the COVID-19 pandemic
on our business and operations, including any adverse impact on
advertising revenue or subscriber revenue. A detailed discussion of
these and other risks and uncertainties that could cause actual
results and events to differ materially from our estimates and
forward-looking statements is included in our filings with the U.S.
Securities and Exchange Commission (“SEC”), including our Annual
Report on Form 20-F filed with the SEC on February 12, 2020, as
updated in our Form 6-K filed with the SEC on October 29, 2020
(containing the interim condensed consolidated financial statements
for the three months ended September 30, 2020), and subsequently
filed Annual Reports or reports for our interim results on Form
6-K. We undertake no obligation to update forward-looking
statements to reflect events or circumstances occurring after the
date of this shareholder letter.
Rounding
Certain monetary amounts, percentages, and other figures
included in this letter have been subject to rounding adjustments.
The sum of individual metrics may not always equal total amounts
indicated due to rounding.
Consolidated statement of
operations
(Unaudited)
(in € millions, except share and per share
data)
Three months ended
Year ended
December 31, 2020
September 30, 2020
December 31, 2019
December 31, 2020
December 31, 2019
Revenue
2,168
1,975
1,855
7,880
6,764
Cost of revenue
1,593
1,486
1,381
5,865
5,042
Gross profit
575
489
474
2,015
1,722
Research and development
232
176
173
837
615
Sales and marketing
294
256
276
1,029
826
General and administrative
118
97
102
442
354
644
529
551
2,308
1,795
Operating loss
(69
)
(40
)
(77
)
(293
)
(73
)
Finance income
4
14
7
94
275
Finance costs
(114
)
(90
)
(103
)
(510
)
(333
)
Finance income/(costs) - net
(110
)
(76
)
(96
)
(416
)
(58
)
Loss before tax
(179
)
(116
)
(173
)
(709
)
(131
)
Income tax (benefit)/expense
(54
)
(15
)
36
(128
)
55
Net loss attributable to owners of the
parent
(125
)
(101
)
(209
)
(581
)
(186
)
Loss per share attributable to owners
of the parent
Basic
(0.66
)
(0.53
)
(1.14
)
(3.10
)
(1.03
)
Diluted
(0.66
)
(0.58
)
(1.14
)
(3.10
)
(1.03
)
Weighted-average ordinary shares
outstanding
Basic
189,852,424
188,842,828
182,942,528
187,583,307
180,960,579
Diluted
189,852,424
189,054,064
182,942,528
187,583,307
180,960,579
Consolidated statement of financial
position
(Unaudited)
(in € millions)
December 31, 2020
December 31, 2019
Assets
Non-current assets
Lease right-of-use assets
444
489
Property and equipment
313
291
Goodwill
736
478
Intangible assets
97
58
Long term investments
2,277
1,497
Restricted cash and other non-current
assets
78
69
Deferred tax assets
15
9
3,960
2,891
Current assets
Trade and other receivables
464
402
Income tax receivable
4
4
Short term investments
596
692
Cash and cash equivalents
1,151
1,065
Other current assets
151
68
2,366
2,231
Total assets
6,326
5,122
Equity and liabilities
Equity
Share capital
—
—
Other paid in capital
4,583
4,192
Treasury shares
(175
)
(370
)
Other reserves
1,687
924
Accumulated deficit
(3,290
)
(2,709
)
Equity attributable to owners of the
parent
2,805
2,037
Non-current liabilities
Lease liabilities
577
622
Accrued expenses and other liabilities
42
20
Provisions
2
2
Deferred tax liabilities
—
2
621
646
Current liabilities
Trade and other payables
638
549
Income tax payable
9
9
Deferred revenue
380
319
Accrued expenses and other liabilities
1,748
1,438
Provisions
20
13
Derivative liabilities
105
111
2,900
2,439
Total liabilities
3,521
3,085
Total equity and liabilities
6,326
5,122
Consolidated statement of cash
flows
(Unaudited)
(in € millions)
Three months ended
Year ended
December 31, 2020
September 30, 2020
December 31, 2019
December 31, 2020
December 31, 2019
Operating activities
Net loss
(125
)
(101
)
(209
)
(581
)
(186
)
Adjustments to reconcile net loss to net
cash flows
Depreciation of property and equipment and
lease right-of-use assets
21
21
20
86
71
Amortization of intangible assets
8
7
4
25
16
Share-based payments expense
43
46
28
176
122
Finance income
(4
)
(14
)
(7
)
(94
)
(275
)
Finance costs
114
90
103
510
333
Income tax (benefit)/expense
(54
)
(15
)
36
(128
)
55
Other
4
(3
)
14
7
13
Changes in working capital:
Increase in trade receivables and other
assets
(94
)
(76
)
(14
)
(187
)
(27
)
Increase in trade and other
liabilities
182
155
222
425
454
Increase in deferred revenue
23
20
15
73
59
Increase/(decrease) in provisions
—
7
1
6
(35
)
Interest paid on lease liabilities
(12
)
(13
)
(12
)
(55
)
(37
)
Interest received
1
—
2
4
14
Income tax paid
—
(2
)
—
(8
)
(4
)
Net cash flows from operating
activities
107
122
203
259
573
Investing activities
Business combinations, net of cash
acquired
(194
)
(2
)
—
(336
)
(331
)
Purchases of property and equipment
(35
)
(17
)
(32
)
(78
)
(135
)
Purchases of short term investments
(406
)
(305
)
(231
)
(1,354
)
(901
)
Sales and maturities of short term
investments
505
197
165
1,421
1,163
Change in restricted cash
2
(2
)
(2
)
2
2
Other
(4
)
(5
)
(5
)
(27
)
(16
)
Net cash flows used in investing
activities
(132
)
(134
)
(105
)
(372
)
(218
)
Financing activities
Payments of lease liabilities
(8
)
(6
)
(4
)
(24
)
(17
)
Lease incentives received
7
6
—
20
15
Repurchases of ordinary shares
—
—
(30
)
—
(438
)
Proceeds from exercise of stock
options
45
96
71
319
154
Proceeds from the issuance of warrants
—
—
—
—
15
Proceeds from the exercise of warrants
—
—
74
—
74
Other
(11
)
(11
)
(2
)
(30
)
(6
)
Net cash flows from/(used in) financing
activities
33
85
109
285
(203
)
Net increase in cash and cash
equivalents
8
73
207
172
152
Cash and cash equivalents at beginning of
the period
1,182
1,148
877
1,065
891
Net exchange (losses)/gains on cash and
cash equivalents
(39
)
(39
)
(19
)
(86
)
22
Cash and cash equivalents at period
end
1,151
1,182
1,065
1,151
1,065
Calculation of basic and diluted loss
per share
(Unaudited)
(in € millions, except share and per share
data)
Three months ended
Year ended
December 31, 2020
September 30, 2020
December 31, 2019
December 31, 2020
December 31, 2019
Basic loss per share
Net loss attributable to owners of the
parent
(125
)
(101
)
(209
)
(581
)
(186
)
Share used in computation:
Weighted-average ordinary shares
outstanding
189,852,424
188,842,828
182,942,528
187,583,307
180,960,579
Basic loss per share attributable
to owners of the parent
(0.66
)
(0.53
)
(1.14
)
(3.10
)
(1.03
)
Diluted loss per share
Net loss attributable to owners of the
parent
(125
)
(101
)
(209
)
(581
)
(186
)
Fair value gains on dilutive warrants
—
(9
)
—
—
—
Net loss used in the computation of
diluted loss per share
(125
)
(110
)
(209
)
(581
)
(186
)
Shares used in computation:
Weighted-average ordinary shares
outstanding
189,852,424
188,842,828
182,942,528
187,583,307
180,960,579
Warrants
—
211,236
—
—
—
Diluted weighted-average ordinary
shares
189,852,424
189,054,064
182,942,528
187,583,307
180,960,579
Diluted loss per share attributable
to owners of the parent
(0.66
)
(0.58
)
(1.14
)
(3.10
)
(1.03
)
Reconciliation of IFRS to Non-IFRS
Results
(Unaudited)
(in € millions, except percentages)
Three months ended
Year ended
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
IFRS revenue
2,168
1,855
7,880
6,764
Foreign exchange effect on 2020 revenue
using 2019 rates
131
243
Revenue excluding foreign exchange
effect
2,299
8,123
IFRS revenue year-over-year change %
17
%
16
%
Revenue excluding foreign exchange effect
year-over-year change %
24
%
20
%
IFRS Premium revenue
1,887
1,638
7,135
6,086
Foreign exchange effect on 2020 Premium
revenue using 2019 rates
110
216
Premium revenue excluding foreign exchange
effect
1,997
7,351
IFRS Premium revenue year-over-year change
%
15
%
17
%
Premium revenue excluding foreign exchange
effect year-over-year change %
22
%
21
%
IFRS Ad-Supported revenue
281
217
745
678
Foreign exchange effect on 2020
Ad-Supported revenue using 2019 rates
21
27
Ad-Supported revenue excluding foreign
exchange effect
302
772
IFRS Ad-Supported revenue year-over-year
change %
29
%
10
%
Ad-Supported revenue excluding foreign
exchange effect year-over-year change %
39
%
14
%
Free Cash Flow
(Unaudited)
(in € millions)
Three months ended
Year ended
December 31, 2020
September 30, 2020
December 31, 2019
December 31, 2020
December 31, 2019
Net cash flows from operating
activities
107
122
203
259
573
Capital expenditures
(35
)
(17
)
(32
)
(78
)
(135
)
Change in restricted cash
2
(2
)
(2
)
2
2
Free Cash Flow
74
103
169
183
440
________________________ 1
Free Cash Flow is a non-IFRS measure. See
“Use of Non-IFRS Measures” and “Reconciliation of IFRS to Non-IFRS
Results” for additional information.
2
As of December 31, 2020, we have no
material outstanding indebtedness, other than lease liabilities
recognized under IFRS 16.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210203005304/en/
Investor Relations: Bryan Goldberg Lauren Katzen
ir@spotify.com
Public Relations: Dustee Jenkins press@spotify.com
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