Shares of Swedish audio-streaming giant Spotify Technology crashed 15.20% on Tuesday, 28 April, falling to $420.53 apiece after the company forecast second-quarter earnings and premium subscribers below estimates, even as its first-quarter earnings topped Wall Street expectations.
The audio streaming platform expects operating income of €630 million in the current quarter. The forecast came in lower than its record operating income of €715 million in the first quarter, which beat estimates of €681.6 million, driven by lower payroll taxes.
For the first quarter, Spotify’s monthly active users grew to 761 million, up 12% from the same quarter a year ago and above the company’s prior guidance of 759 million. The Swedish company’s premium subscribers increased 9% to 293 million, in line with its prior guidance.
It expects active users to rise to 778 million in the ongoing quarter, ahead of analysts’ estimates of 773 million. However, the company is forecasting 299 million premium subscribers, slightly below analyst expectations of 300 million.
Though the premium subscriber forecast for the second quarter came in slightly below analyst expectations, Spotify executives said on Tuesday that the company still expects profit-margin improvement and healthy subscriber growth for the full year.
The music streaming leader reported an 8% jump in revenue to €4.5 billion in Q1, in line with its prior guidance. Premium revenue grew 10%, while ad-supported revenue declined 5%. For the current quarter, Spotify estimates revenue of €4.8 billion.
Spotify leans on subscription price increases to drive profitability
Spotify has repeatedly hiked prices for its premium subscription in an attempt to improve profitability. In February, the company increased the subscription price from $11.99 to $12.99 a month in the US.
It continues to expand its content offerings to keep users engaged on the platform, including by building a larger library of audiobooks and podcasts. It has also introduced messaging among users and more music discovery and personalisation features.
Earlier this month, the company expanded its Prompted Playlist feature, which lets users create playlists based on their listening habits, to include podcasts.
Meanwhile, the company is moving deeper into the daily habits of its users, and this time the shift goes beyond listening. Spotify is introducing workout classes from Peloton Interactive to its premium subscribers, marking its first meaningful step into fitness content.
Stock slides 27% in 2026
Spotify’s transformation from a low-margin streaming platform into a more profitable subscription business drove a major rally last year, but the stock has since pulled back sharply and is now down 27% in 2026 and 46.5% from its June 2025 peak of $785.
Wall Street has yet to be fully convinced that the company has a strong enough plan to defend itself in the rapidly evolving artificial intelligence landscape, while it also continues to face competitive pressure from big tech platforms like YouTube, Amazon, and Meta Platforms, where users also consume music, books, and podcasts.
AI features Spotify has rolled out include adding voice interaction to its personalised music tool AI DJ and introducing AI Playlist for generating playlists using natural-language prompts.
Chief Financial Officer Christian Luiga said Spotify is going to ship “a lot of features” during the middle of this year.
(With inputs from Bloomberg and Reuters)
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