Input cell

Operating Information
All dollar values in millions
Number of Premium Subscribers
Annual Subscription Revenue/ Subscriber
Preimum Content Cost as % of revenues
Effective tax rate (current)
Effective tax rate (steady state)
Allocated Costs
R&D, S,G&A costs
Existing User Data
Lifetime of a Spotify Subscriber (in years)
Annual Renewal Probability
Growth rate in Subscription Charge
Growth rate in Content Cost/Subscriber
New User Information
Total cost of acquiring new users in most recent year
Growth rate in # Members (Years 1-5)
Growth rate in # Members (Years 6-10)
Growth rate in # Members after year 10
G&A Data
Growth rate approach for R&D, SG&A
Growth rate in corporate expenses for next 10 years
Advertising Revenues
Advertising Revenues in most recent year
Expected growth rate in revenues, years 1-5
Expected growth rate in revenues, years 6-10
Macroeconomic Data
Risk free Rate
Inflation Rate
Cost of capital for existing users (input choice)
Cost of capital (existing users)
Cost of capital for new users (input choice)
Cost of capital (new users)
Other Company Data
Cash & Marketable Securities
Cross Holdings in Other Companies
Debt Outstanding
Equity Options oustanding (value)
 Computed Value

Most Recent Prior year

71.00 48.00
$77.63 $86.75
79.24%
25.00% 0.00%
25.00%

$814.81

15.00
94.5%
3.00%
1.50%

$700.00
25%
10%
1%

A4. Direct Input

5.00%
Do not input
$ 513.58
10%
5%

2.85%
2.00%
B3. Median of Global companies (8.5%)
8.50%
B4. 75th percentile of Global companies (10%)
10.00% Do not input

$1,863.96
$1,123.46
$0.00
$ 1,659.60
 Notes/Comments

Number of users , with growth over last year

Subscription Revenues/ # Users
Content cost as % of subscription revenues (starting year)
Effective tax rate in most recent year
Effective tax rate in steady state

Total other Costs (other than content and marketing)

Typical subscriber life with company

Annual Renewal probability (assumed to be constant over time)
Growth Rate in Subscription Charge/Subscriber
Growth rate in Content Cost/Subscriber

Selling and Marketing Cost in most recent year

Growth Rate in # Premium Subscribers - Years 1-5
Growth Rate in # Premium Subscribers - Years 6-10
Growth Rate in # Premium Subscribers after year 10

Growth Rate option for total other costs

DO NOT INPUT

Total Revenues from Advertising (most recent year)

Growth rate in advertising revenues - Years 1-5
Growth rate in advertising revenues - Years 6-10

Risk free Rate

Inflation Rate
Cost of capital option (for existing subscribers)
DO NOT INPUT
Cost of capital option (for new subscribers
DO NOT INPUT

Cash and Marketable Securities

Minority Cross Holdings
Total Debt Outstanding
Value of Equity Options outstanding
Valuation Output Summary
Category
Existing Members
New Members
Advertising Revenues
Corporate Expenses
Value of Spotify Premium
 Corporate Expense Growth
A1. Grow at same rate as total users 16.73%
A2. Grow at inflation rate 2.00%
A3. Grow at risk free rate 2.85%
A4. Direct Input 5.00%

Cost of Capital (in euros)

B1. Lowest decile of Global companies (7%) 7.00%
b2. 25th percentile of Global companies (7.5%) 7.50%
B3. Median of Global companies (8.5%) 8.50%
B4. 75th percentile of Global companies (10%) 10.00%
B5. Ninth decile of Global companies (12%) 12.00%
B6. Direct input 9.24%

tion Output Summary

Value per user Aggregate Value
$ 108.65 $7,714
$ 81.35 $20,765
$2,922
$13,140
$21,248
Value of Premium Subscribers
Base Year 1 2
Life Indicator 1 1
Membership Survival 1.0000 0.9450 0.8930
Revenue/Subscriber $ 77.63 $ 79.96 $ 82.36
Content Cost/ Subscriber $ 61.51 $ 62.44 $ 63.37
Operating Profit/Loss per Subscriber $ 16.12 $ 17.52 $ 18.98
Tax rate 25.00% 25.000% 25.000%
After-tax Operating Income $12.09 $12.42 $12.72
Present Value (at Cost of Capital) $11.45 $10.80
Life of subscriber = 15.00
Value per Subscriber = $108.65
Number of Premium Subscribers = 71.00
Value of Premium Subscribers = $ 7,714.28

Value of New Premium Subscribers

Cost of acquiring New Subscriber = $ 27.30
Value per new user (in today's $) = $81.35

Base Year 1 2
Total Subscribers 71.00 84.85 106.06
New Subscribers 0.00 17.75 25.88
Value per Subscriber $81.35 $82.98 $84.64
Value added by new Subscribers $1,472.86 $2,190.22
Terminal Value (New Subscribers)
Present Value $ 1,338.96 $ 1,810.10
Value Added by New Users $ 20,764.56

Value of Advertising Revenues

Base Year 1 2
Advertising Revenue $ 513.58 $ 564.94 $ 621.43
- Content Costs $ 406.96 $ 441.14 $ 478.18
Operating Income $ 106.62 $ 123.80 $ 143.25
After-tax Operating Income $ 79.96 $ 92.85 $ 107.44
Terminal Value
PV of After-tax Operating Income $ 85.58 $ 91.26
Value of Advertising Business $ 2,921.70

Value Drag of Corporate Expenses (Cost)

Base Year 1 2
Total R&D & G&A Costs $ 814.81
Corporate Expenses $814.81 $855.56 $898.33
After-tax Corporate Expenses $ 641.67 $ 673.75
Terminal Value (Corporate Exp)
PV of Corporate Expenses $591.40 $572.32
Value Drag of Corporate Expenses $13,139.75

Valuing Spotify
Value of Existing Subscribers $7,714.28
Value of New Subscribers $20,764.56
Value of Advertising Business $2,921.70
- PV of Corporate Expenses $13,139.75
Value of Spotify Operating Assets $18,260.80
+ Cash & Cross Holdings $2,987.42
- Debt $0.00
Value of Equity $21,248.22
- Value of Equity Options $ 1,659.60
Value of Equity in common stock $19,588.61
 3 4 5 6 7 8 9
1 1 1 1 1 1 1
0.8439 0.7975 0.7536 0.7122 0.6730 0.6360 0.6010
$ 84.83 $ 87.37 $ 89.99 $ 92.69 $ 95.47 $ 98.34 $ 101.29
$ 64.32 $ 65.29 $ 66.27 $ 67.59 $ 68.94 $ 70.32 $ 71.73
$ 20.50 $ 22.08 $ 23.73 $ 25.10 $ 26.53 $ 28.02 $ 29.56
25.000% 25.000% 25.000% 25.000% 25.000% 25.000% 25.000%
$12.98 $13.21 $13.41 $13.41 $13.39 $13.36 $13.32
$10.16 $9.53 $8.92 $8.22 $7.56 $6.96 $6.39

3 4 5 6 7 8 9
132.57 165.71 207.14 227.86 250.64 275.70 303.28
32.35 40.43 50.54 32.11 35.32 38.85 42.73
$86.33 $88.06 $89.82 $91.61 $93.45 $95.32 $97.22
$2,792.53 $3,560.48 $4,539.61 $2,941.44 $3,300.30 $3,702.94 $4,154.70

$ 2,098.07 $ 2,431.85 $ 2,818.74 $ 1,660.37 $ 1,693.58 $ 1,727.45 $ 1,762.00

3 4 5 6 7 8 9
$ 683.58 $ 751.93 $ 827.13 $ 868.48 $ 911.91 $ 957.50 $ 1,005.38
$ 518.34 $ 561.87 $ 609.06 $ 633.30 $ 658.51 $ 684.73 $ 711.98
$ 165.23 $ 190.06 $ 218.07 $ 235.18 $ 253.39 $ 272.78 $ 293.39
$ 123.92 $ 142.54 $ 163.55 $ 176.38 $ 190.04 $ 204.58 $ 220.05

$ 97.02 $ 102.86 $ 108.77 $ 108.11 $ 107.36 $ 106.52 $ 105.60

3 4 5 6 7 8 9

$943.25 $990.41 $1,039.93 $1,091.93 $1,146.53 $1,203.85 $1,264.05

$ 707.44 $ 742.81 $ 779.95 $ 818.95 $ 859.89 $ 902.89 $ 948.03

$553.86 $535.99 $518.70 $501.97 $485.78 $470.11 $454.94

 10 11 12 13 14 15 16
1 1 1 1 1 1 0
0.5680 0.5367 0.5072 0.4793 0.4529 0.4280 0.4045
$ 104.33 $ 107.46 $ 110.68 $ 114.00 $ 117.42 $ 120.94 $ 124.57
$ 73.16 $ 74.63 $ 76.12 $ 77.64 $ 79.20 $ 80.78 $ 82.40
$ 31.16 $ 32.83 $ 34.56 $ 36.36 $ 38.23 $ 40.16 $ 42.18
25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
$13.27 $13.22 $13.15 $13.07 $12.99 $12.89 $0.00
$5.87 $5.39 $4.94 $4.53 $4.14 $3.79 $0.00

10
333.60
47.01
$99.17
$4,661.57
$4,217.97
$ 3,423.45

10
$ 1,055.65
$ 740.32
$ 315.32
$ 236.49
$ 4,304.99
$ 2,008.63

10

$1,327.25
$ 995.44
$ 18,120.45
$8,454.68
 17 18 19 20
0 0 0 0
0.3822 0.3612 0.3414 0.3226
$ 128.31 $ 132.16 $ 136.12 $ 140.21
$ 84.04 $ 85.72 $ 87.44 $ 89.19
$ 44.27 $ 46.43 $ 48.69 $ 51.02
25.00% 25.00% 25.00% 25.00%
$0.00 $0.00 $0.00 $0.00
$0.00 $0.00 $0.00 $0.00
Yes or No Cost of capital
Yes Lowest decile of US companies (7%)
No 25th percentile of US companies (7.5%)
Median of US companies (8%)
75th percentile of US companies (10%)
Ninth decile of US companies (12%)
Direct input