Spotify (SPOT) shares fell as much as 10% in early premarket trading Tuesday after the audio streamer missed second quarter earnings and revenue expectations.
The results follow a remarkable 120% rally over the past year, as the stock rebounded from 2022 lows on the back of price hikes, cost cuts, and investor enthusiasm for AI and advertising.
Spotify hit a record high of $738.45 earlier this month, but shares slid to around $635 immediately following the results.
Spotify reported second quarter revenue of €4.19 billion ($4.86 billion), missing analyst expectations of €4.27 billion, though up from €3.81 billion in the same period last year.
The company posted an adjusted loss of €0.42 ($0.49) per share, sharply missing forecasts for a profit of €1.97 and down from earnings of €1.33 in Q2 2024.
“Outsized currency movements during the quarter impacted reported revenue by €104 million vs. guidance,” the company said in the earnings release. Operating income also fell short of expectations, although subscriber metrics
Spotify’s massive rally heading into the earnings report was fueled by a sweeping business overhaul, including layoffs, leadership changes, and a pullback from costly podcast exclusivity.
After spending $1 billion to build out its podcast business, the company has since scaled back and narrowed its focus. Still, it remains committed to the medium, paying over $100 million to creators in Q1 alone, including high-profile names like Joe Rogan and Alex Cooper.
