Overview
- Investors sold the shares Tuesday after the company guided below expectations for second‑quarter profit and subscriber adds, sending the stock down as much as 12% in premarket trading before trimming losses.
- First‑quarter results were solid with revenue of about €4.53 billion, 761 million monthly active users, 293 million Premium subscribers, a 33% gross margin, and record operating income of roughly €715 million.
- For Q2, Spotify projected about €630 million in operating income versus analyst hopes near €684 million and forecast 299 million Premium subscribers, short of estimates around 302 million, while total users are seen rising to 778 million.
- Ad‑supported revenue fell 5% year over year, and the CFO said heavier listening by free users increased music licensing and other content costs faster than ad sales grew, which pressured the ad tier’s margins.
- Co‑CEOs Gustav Söderström and Alex Norström said spending is rising on AI features, marketing, and computing power rather than headcount, as the company rolls out tools like AI DJ, Prompted Playlist, Taste Profile, and a new Peloton fitness content partnership.