Spotify（声田）研究（英文版）

Important disclosures appear at the back of this report GP Bullhound LLP is authorised and regulated by the Financial Conduct Authority GP Bullhound Inc is a member of FINRA GP Bullhound Sidecar III is an investor in Spotify. GP Bullhound is not or has not been engaged as an advisor to or received compensation from Spotify. Dealmakers in Technology$55bn by 2020SPOTIFYDealmakers in Technology 03 EXECUTIVE SUMMARY04 SCENARIO OVERVIEW05 EXPLOSIVE SUBSCRIBER GROWTH06 PREMIUM SUBSCRIBERS VS. TOTAL SUBSCRIBERS07 ROOM TO INCREASE MARKET PENETRATION08 TIMING OF PROFITABILITY09 NEW CONTRACTS WITH LABELS WILL DRIVE GROSS MARGIN09 STOCK MARKET INTRODUCTION & LONG TERM VALUATION10 SPOTIFY VS. APPLECONTENTS200M PREMIUM SUBSCRIBERS / $55BN VALUATIONOUR UPDATED VALUATION THESIS BY 20203SPOTIFY: $55 BILLION BY 2020SPOTIFY UPDATE» Given Spotify’s explosive growth we believe the firm will be valued at $55bn by 2020» Our target stock market introduction valuation for Spotify is over $20bn» Spotify is trending towards 100m premium subscribers by mid-2018 – estimates point toward 200m by the end of 2020» We expect emerging markets to drive future growth which will likely dilute average revenue per premium subscriber – we have therefore decreased our ARPPS estimates by 10% to $80» As Spotify’s ambition evolves the company is now seeking to become the third largest player in terms of advertising – behind Google and Facebook – which will drive ad revenue from non-premium subscribers» Gross margin will steadily increase due to more beneficial agreements with labels – estimated levels are consistent with our previous research reports» Premium subscribers as a percentage of total subscribers is estimated to be 40% in 2020 – slightly below today’s level of 43%» Our valuation reasoning and multiples have not changed since the last report – subscriber growth has however been stronger than we anticipatedOctober 2017EXECUTIVE SUMMARYTARGET STOCK MARKET INTRODUCTION VALUATION OVER $20BN OUR UPDATED STOCK MARKET INTRODUCTION THESIS4Stock Market Introduction2020Implied Market Cap$23 Bn$55 BnPremium subscribers (m)70200Revenue per premium subscriber ($/year)8780Total premium subscriber revenue ($m)6,09016,000Non-premium subscribers (m)100300Revenue non-premium subscriber ($/year)512Ad revenues ($m)4753,600Ad revenue (%)7%18%TOTAL REVENUES6,56519,600COGS premium subscriber-5,177-12,320COGS ad revenueus-285-1,800TOTAL COGS-5,462-14,120Gross margin17%28%R&D-460-1,176R&D7%6%SG&A-1,313-1,764SG&A20%9%EBIT-6692,540EBIT %-10%13%Add back D&A66196D&A1%1%EBITDA-6032,736EBITDA %-9%14%EV/Sales multiple3.5x2.8xEV/EBITDA multiplen.m.20xEV22,65054,720Net debt-2000Market cap22,85054,720NOSO FD (M)4.54.5Share price5,07812,160RETURN FROM TODAY1.4x3.3xImplied EV/Revenue3.5x2.8xImplied EV/Gross profit multiple20.5x10.0xImplied EV/EBIT multiplen.m.21.5xSCENARIOOverviewSource: Annual reports, CapitalIQ, GP Bullhound analysis Note: ‘return from today’ refers to the return an investor receives if purc