Stockholm, April 28, 2026, 14:02 CEST
Shares of Spotify Technology SA slid 12% in premarket action Tuesday, after the company’s outlook for second-quarter operating income and paying-user gains landed short of Wall Street’s targets. The music-streaming platform projected €630 million in operating income for the period, falling short of the €684 million average forecast from LSEG. That guidance overshadowed a record first-quarter operating profit, according to .
This shift is notable: investor focus has moved beyond just user growth. Spotify has hiked prices, trimmed expenses, and leaned harder into artificial intelligence in recent years. Now the market is weighing whether those changes boost profit, but not at the expense of growth in Spotify’s biggest markets.
One more twist: Spotify’s first-quarter operating income got a lift from lighter “social charges”—payroll taxes partly tied to share-based pay. According to the company, those charges landed €49 million under projections after share-price swings this quarter. Investors shouldn’t bank on that kind of tailwind showing up again.
Spotify is projecting 778 million monthly active users in the second quarter—these are the broad monthly listeners. On the Premium side, the company is aiming for 299 million paying subscribers. That user forecast beat what analysts were looking for, but on subscribers, the target misses: it suggests 6 million net additions, underwhelming compared to the 302 million analysts had penciled in, according to Reuters.
The first quarter numbers came in strong. Revenue climbed 8% year-on-year to €4.533 billion, and up 14% on a constant-currency basis. Operating income jumped 40% to €715 million. Net income reached €721 million, sharply higher than the €225 million posted a year ago, with diluted earnings per share at €3.45.
Spotify wrapped up March counting 761 million monthly active users, a 12% jump year over year. Premium subscribers reached 293 million—up 9%. Gross margin landed at 33.0%, marking a first-quarter record for the streaming giant.
Beneath the surface, the numbers told a different story. Premium revenue climbed 10% to €4.148 billion, but ad-supported revenue slipped 5%, landing at €385 million. Spotify pointed to price hikes as a boost for average revenue per Premium user, although currency swings and a shifting product-market mix dampened part of the benefit.
Spotify hit its subscriber growth target, according to Co-CEO Alex Norström, who pointed to “healthy engagement” across both loyal and newly added users. His counterpart, Co-CEO Gustav Söderström, noted there’s “significant room to grow across users, formats and engagement.” Spotify
Spotify is pushing out new features in a bid to keep users engaged. Last quarter, it broadened access to Prompted Playlist, bringing it to podcasts and additional Premium subscribers, introduced SongDNA in beta for Premium users around the world, and debuted audiobook charts for listeners in the U.S. and UK.
With Apple and Amazon’s streaming platforms in the mix, there’s no slack for a disappointing paid-subscriber forecast. Spotify’s current leadership — co-CEOs Norström and Söderström, founder Daniel Ek now executive chairman — is banking on a combination of price hikes, AI-powered recommendations, and podcasts to drive momentum.
The risk is clear: higher prices could slow new Premium sign-ups, and if ad rates don’t firm up, Spotify’s margin narrative gets shakier. In its own filing, the company flagged plenty of threats—competition for users, advertisers, and time; unpredictable revenue growth; swings in ad inventory; and foreign exchange volatility, all weighing on potential results.
Spotify’s cash reserves remain solid. Free cash flow hit €824 million for the quarter, a 54% jump over last year. By the end of March, the company was sitting on €8.8 billion in cash, restricted cash, and short-term investments. Management spent €306 million buying back shares and retired €1.3 billion in exchangeable notes—moves that point to a focus on shoring up the balance sheet as profits climb and spending on growth continues.
