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Spotify Stock Drops: Spotify shares fell more than 13% after markets opened Tuesday.
Investors reacted to weaker forward guidance despite the company posting stronger-than-expected first-quarter results.
The Swedish audio-streaming company reported revenue of 4.5 billion euros, or about $5.3 billion, for the quarter.
That marked an 8% increase from the same period last year.
Spotify also said monthly active users climbed 12% year over year to 761 million. The figure came in slightly above FactSet analyst estimates.
Despite the earnings beat, cautious projections appeared to weigh on investor sentiment and pushed the stock sharply lower in early trading.
Spotify said its premium subscriber base increased 9% year over year to 293 million. The company added 3 million net premium subscribers during the quarter.
Looking ahead, Spotify forecast continued user growth in the current quarter.
The company expects to add 17 million net users, bringing total monthly active users to 778 million.
Spotify also projected premium subscribers will rise by 6 million to reach 299 million during the quarter.
Spotify’s second-quarter forecast for monthly active users came in slightly above Wall Street expectations.
However, the company’s premium subscriber outlook fell short of analyst projections.
According to FactSet estimates, analysts had expected premium subscribers to rise to just over 300.4 million. Spotify’s guidance pointed to a lower figure.
The company said its outlook remains subject to substantial uncertainty, according to its earnings presentation.
Spotify also projected second-quarter operating income of 630 million euros.
That was below the roughly 680 million euros analysts had anticipated, based on FactSet data.
Spotify has repeatedly raised prices for its premium subscription service as the company works to strengthen profitability.
In February, Spotify increased its U.S. monthly premium plan price from $11.99 to $12.99.
Despite those efforts, the stock had fallen 14% year to date as of Monday’s closing bell.
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