Spotify Technology SA (NYSE:SPOT) shares fell nearly 11% on Tuesday after the streaming company posted quarterly results that beat expectations on revenue, profit and user growth but delivered mixed second-quarter guidance, particularly on profitability and subscriber additions.
The US-listed stock decline came despite stronger-than-expected first-quarter 2026 performance, including revenue of €4.53 billion versus estimates of €4.52 billion, and earnings per share of €3.45 compared with forecasts of €2.95.
Monthly active users (MAUs) rose 12% year-over-year to 761 million, slightly ahead of expectations, while net additions of 10 million far exceeded the 3 million expected by analysts. Gross margin came in at 33.0%, marginally above estimates.
Premium revenue increased 10% to €4.148 billion, while ad-supported revenue fell 5% to €385 million. Operating income rose 40% to €715 million, net income reached €721 million, and free cash flow climbed 54% to €824 million. The company ended the quarter with €8.8 billion in cash and short-term investments.
For the second quarter, Spotify forecast MAUs of 778 million and revenue of €4.8 billion, both slightly ahead of expectations. However, operating income guidance of €630 million came in below estimates of €674.3 million. Subscriber net additions of about 6 million also missed expectations of 7 million.
Premium subscribers stood at 293 million, up 9% year-over-year, while ad-supported MAUs rose 14% to 483 million.
Co-CEO Alex Norström said the company was seeing strong engagement across its platform. “We surpassed 760 million MAU, delivered on the subscriber growth we aimed to achieve, and saw healthy engagement from existing users, reactivations and new users alike,” he said.
Norström added that Spotify’s personalized free-tier rollout was increasing user engagement in key markets such as the United States.
Co-CEO Gustav Söderström said the company’s scale, creator relationships and personalization technology positioned it for continued growth and expansion into new formats and use cases.
The results come under Spotify’s new leadership structure, with Norström and Söderström serving as co-CEOs since the start of 2026 after founder Daniel Ek transitioned to executive chairman.