Spotify Technology S.A. Files 20-F Report for Fiscal Year Ended December 31, 2023

TL;DR

<b>Spotify Technology S.A. has submitted its 2023 annual report on Form 20-F.</b>

AI Summary

Spotify Technology S.A. (SPOT) filed a Foreign Annual Report (20-F) with the SEC on February 8, 2024. Spotify Technology S.A. filed its annual report on Form 20-F for the fiscal year ended December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company's principal executive offices are located at 5 Place de la Gare, Luxembourg. The filing was made as of February 8, 2024. The report is filed under the Securities Exchange Act of 1934.

Why It Matters

For investors and stakeholders tracking Spotify Technology S.A., this filing contains several important signals. This filing provides a comprehensive overview of Spotify's financial performance and business operations for the fiscal year 2023, crucial for investors assessing the company's health and future prospects. As a 20-F filing, it offers detailed information required for foreign private issuers, including financial statements and risk factors, enabling a deeper understanding of the company's global operations and regulatory compliance.

Risk Assessment

Risk Level: — Spotify Technology S.A. shows moderate risk based on this filing. The filing is a standard annual report for a foreign private issuer, which typically contains a broad range of information but does not inherently signal immediate positive or negative developments beyond routine disclosure.

Analyst Insight

Review the detailed financial statements and risk factors within the 20-F filing to understand Spotify's performance and potential challenges in fiscal year 2023.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed period of report)
• 2024-02-08 — Filing Date (Filed as of date)

Key Players & Entities

• Spotify Technology S.A. (company) — Filer
• 2024-02-08 (date) — Filed as of date
• 2023-12-31 (date) — Conformed period of report
• Luxembourg (location) — Business address city
• 001-38438 (other) — SEC file number

FAQ

Industry Context

Spotify operates in the digital music streaming industry, a highly competitive market characterized by rapid technological advancements and evolving consumer preferences.

Regulatory Implications

As a foreign private issuer, Spotify is subject to specific SEC regulations, including the filing of annual reports on Form 20-F, which differ from domestic U.S. reporting requirements.

What Investors Should Do

1. Analyze Spotify's revenue streams and growth drivers for FY2023.
2. Assess the competitive landscape and Spotify's market position as detailed in the filing.
3. Evaluate any new risks or changes in existing risk factors presented in the report.

Key Dates

• 2024-02-08: Filing Date — Submission of the annual report for the fiscal year 2023.
• 2023-12-31: Fiscal Year End — End of the reporting period covered by the 20-F filing.

Year-Over-Year Comparison

This is the initial filing for the fiscal year 2023, providing the latest annual data for Spotify Technology S.A.

Filing Documents

• ck0001639920-20231231.htm (20-F) — 3738KB
• spot-20231231xexx11.htm (EX-1.1) — 186KB
• spot-20231231xexx81.htm (EX-8.1) — 16KB
• spot-20231231xexx121.htm (EX-12.1) — 9KB
• spot-20231231xexx122.htm (EX-12.2) — 9KB
• spot-20231231xexx131.htm (EX-13.1) — 5KB
• spot-20231231xexx132.htm (EX-13.2) — 5KB
• spot-20231231xexx151.htm (EX-15.1) — 10KB
• spot-20231231xexx971.htm (EX-97.1) — 25KB
• 0001639920-24-000004.txt (&nbsp;) — 16722KB
• ck0001639920-20231231.xsd (EX-101.SCH) — 164KB
• ck0001639920-20231231_cal.xml (EX-101.CAL) — 118KB
• ck0001639920-20231231_def.xml (EX-101.DEF) — 595KB
• ck0001639920-20231231_lab.xml (EX-101.LAB) — 1350KB
• ck0001639920-20231231_pre.xml (EX-101.PRE) — 921KB
• ck0001639920-20231231_htm.xml (XML) — 2826KB

Forward-looking Statements

Forward-looking Statements 3 PART I 2

Identity of Directors, Senior Management and Advisers

Item 1. Identity of Directors, Senior Management and Advisers 4

Offer Statistics and Expected Timetable

Item 2. Offer Statistics and Expected Timetable 4

Key Information

Item 3. Key Information 4

Information on the Company

Item 4. Information on the Company 34

Unresolved Staff Comments

Item 4A. Unresolved Staff Comments 42

Operating and Financial Review and Prospects

Item 5. Operating and Financial Review and Prospects 42

Directors, Senior Management and Employees

Item 6. Directors, Senior Management and Employees 58

Major Shareholders and Related Party Transactions

Item 7. Major Shareholders and Related Party Transactions 76

Financial Information

Item 8. Financial Information 78

The Offer and Listing

Item 9. The Offer and Listing 79

Additional Information

Item 10. Additional Information 79

Quantitative and Qualitative Disclosures About Market Risk

Item 11. Quantitative and Qualitative Disclosures About Market Risk 87

Description of Securities Other than Equity Securities

Item 12. Description of Securities Other than Equity Securities 89 PART II 90

Defaults, Dividend Arrearages and Delinquencies

Item 13. Defaults, Dividend Arrearages and Delinquencies 90

Material Modifications to the Rights of Security Holders and Use of Proceeds

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 90

Controls and Procedures

Item 15. Controls and Procedures 90

Audit Committee Financial Expert

Item 16A. Audit Committee Financial Expert 90

Code of Ethics

Item 16B. Code of Ethics 91

Principal Accountant Fees and Services

Item 16C. Principal Accountant Fees and Services 91

Exemptions from the Listing Standards for Audit Committees

Item 16D. Exemptions from the Listing Standards for Audit Committees 91

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 92

Change in Registrant's Certifying Accountant

Item 16F. Change in Registrant's Certifying Accountant 93

Corporate Governance

Item 16G. Corporate Governance 93

Mine Safety Disclosure

Item 16H. Mine Safety Disclosure 93

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 93

Cybersecurity

Item 16K. Cybersecurity 93 PART III 95

Financial Statements

Item 17. Financial Statements 95

Financial Statements

Item 18. Financial Statements 95

Exhibits

Item 19. Exhibits 95

Signatures

Signatures 98 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS F- 1 i Table of Contents Certain Defined Terms In this report, unless the context otherwise requires, references to "Company," "we," "us," "our," and "Spotify" refer to Spotify Technology S.A. and its direct and indirect subsidiaries on a consolidated basis. Note on Presentation Currency All references in this report to (i) "Euro," "EUR," or "" are to the currency of the member states participating in the European Monetary Union, and (ii) "U.S. dollar," "USD," or "$" are to the currency of the United States. Our reporting currency is the Euro. Presentation of Financial Information In accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), we prepare our consolidated financial statements on a historical cost basis, except for our short term investments, long term investments, Exchangeable Notes (as defined herein), and derivative financial instruments, which have been measured at fair value, and our lease liabilities, which are measured at present value. Non-IFRS Financial Measures In this report, we present Free Cash Flow, which is a financial measure not recognized by IFRS and that may not be permitted to appear on the face of IFRS-compliant financial statements or notes thereto. For a discussion of Free Cash Flow and a reconciliation to its most closely comparable IFRS measures, see "Item 5.B. Liquidity and Capital Resource." Rounding Certain monetary amounts, percentages, and other figures included in this report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them. Table of Contents PART I Table of Contents

Forward-looking Statements

Forward-looking Statements This report 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, retain existing users, and monetize our products and services; competition for users, user listening time, and advertisers; risks associated with our international operations and our ability to manage our growth and the scope and complexity of our business; risks associated with our new products or services and our emphasis on long-term user engagement over short-term results; our ability to predict, recommend, and play content that our users enjoy; our ability to generate profit or positive cash flow on a sustained basis; our ability to convince advertisers of the benefits of our advertising offerings; our ability to forecast or optimize advertising inventory amid evolving industry trends in digital advertising; our ability to generate revenues from podcasts, audiobooks, and other non-music content; potential disputes or liabilities associated with content made available on our Service (as defined below)

Identity of Directors, Senior Management and Advisers

Item 1. Identity of Directors, Senior Management and Advisers Not applicable.

Offer Statistics and Expected Timetable

Item 2. Offer Statistics and Expected Timetable Not applicable.

Key Information

Item 3. Key Information A. [Reserved] B. Capitalization and Indebtedness. Not applicable. C. Reasons for the Offer and Use of Proceeds. Not applicable. 4 Table of Contents D. Risk Factors An investment in our ordinary shares involves a high degree of risk. You should carefully read and consider the following risks, along with the other information included in this Annual Report on Form 20-F. The risks described below may not be the only ones we face. If any of these risks actually occur, our business, operating results, financial condition, and cash flow could be materially impaired. The trading price of our ordinary shares could decline due to any of these risks, and you could lose all or part of your investment. The risks described below are organized by risk type and are not listed in order of their priority to us. Summary Risk Factors Risks Related to Our Business Model, Strategy, and Performance We face significant competition for users, listening time, and advertisers, and we might not be successful at attracting prospective users and retaining existing users, including through predicting, recommending, and playing content that our users enjoy, or effectively monetizing our products and services, including podcasts, audiobooks, and other non-music content. We may not be able to effectively manage our growth, the scope and complexity of our business, and our international operations, including attracting, retaining, and motivating qualified personnel and obtaining rights to stream content on favorable terms. Our new products or services may not be successful and our emphasis on long-term user engagement may not align with the market's expectations. We have incurred significant operating losses in the past and may not be able to generate profit or positive cash flow on a sustained basis. In addition, our revenue growth rate may decline. We may fail to convince advertisers of the benefits of our advertising offerings. Evolving industry trends