Spotify Forecasts Weaker Outlook, Shares Fall 6.2%

Spotify's third-quarter guidance missed analyst expectations on user growth and operating income. The company's Q2 results were largely in-line, but the Q3 outlook sent its shares tumbling 6.2% in premarket trading.

SPOT shares fell about 6.2% in premarket trading after Spotify guided third-quarter operating income to €670 million, below the €677.8 million analysts expected, and monthly active users to 788 million against a 793.6 million estimate . The guidance overshadowed second-quarter results that also came in soft: revenue of €4.78 billion trailed the €4.79 billion FactSet estimate, and adjusted EPS of €2.61 missed the €2.76 consensus.

Slower user growth in North America and Europe weighed on the outlook even as global adoption kept climbing. Premium subscribers crossed 300 million for the first time in the industry, with 7 million net additions beating the company's own guidance of 6 million, a sign the subscriber engine is still running even as near-term profitability softens.

One bright spot in the guidance: Q3 revenue forecast of about €5.0 billion actually exceeded the roughly €4.93 billion consensus, suggesting top-line momentum remains intact even as margins compress.

The sell-off reflects investor sensitivity to Spotify's profitability trajectory as it balances subscriber-growth investment against operating leverage. Watch North America and Europe user trends and whether Q3 operating income tracks toward or below the lowered bar management just set.

Spotify Forecasts Weaker Outlook, Shares Fall 6.2%

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