Spotify forecasts profit below estimates as North America, Europe growth slows, shares fall

ShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountSpotify SPOT-N forecast second-quarter earnings and premium subscribers below estimates on Tuesday, a sign of slowing growth in the Swedish streaming giant’s major markets of Europe and North America, sending its shares down 10 per cent in premarket trading.The company has in recent years tried to boost profitability through price hikes and cost-cutting efforts, as well as AI features that improve discovery and engagement on its platform.Led by Gustav Soderstrom and Alex Norstrom after founder Daniel Ek became executive chairman in January, Spotify competes with rival products from Apple and Amazon.Co-CEO Soderstrom told Reuters that Spotify was investing heavily in new features, including marketing efforts and the computing power needed for AI, rather than expanding its workforce. (function(t) { t.Hotline = t.Hotline || []; t.Hotline.push({ "id": "k8p69ad7", "version": "1.3.3", "period": "5D", "series": [ { "ticker": "SPOT", "title": "Spotify Technology S.A.", "exchange": "Stocks - NYSE" } ] }); var b = document.getElementsByTagName("body")[0]; if (!b.classList.contains("gc-hotline-init")) { b.classList.add("gc-hotline-init"); var c = document.createElement('link'); var j = document.createElement('script'); c.href = 'https://www.theglobeandmail.com/files/interactive/hotline/library/1.3.3/hotline.min.css?token=1.3.3-34'; c.rel = 'stylesheet'; j.src = 'https://www.theglobeandmail.com/files/interactive/hotline/library/1.3.3/hotline.min.js?token=1.3.3-34'; j.async = true; j.defer = true; document.getElementsByTagName('head')[0].appendChild(c); document.getElementsByTagName('head')[0].appendChild(j); } })(this); The company expects operating income of €630-million (US$736.41-million) for the second quarter, below LSEG-compiled analysts’ average estimate of €684-million euros.That contrasted sharply with Spotify’s record operating income of €715-million in the first quarter, which beat estimates of €681.6-million, driven by lower payroll taxes.Such taxes, called social charges, are tied to the value of the company’s share price, as lower stock prices can lead to a decline in charges. Spotify shares have fallen around 15 per cent this year after rising about 30 per cent in 2025.Spotify unveils new podcast creator tools, lowers monetization thresholdCFO Christian Luiga said Spotify is going to ship “a lot of features” during the middle of this year, driving up operating expenses over the next couple of quarters.AI features Spotify has rolled out include adding voice interaction to its personalized music tool AI DJ and introducing AI Playlist for generating playlists using natural-language prompts.Earlier this month, the company also expanded its Prompted Playlist feature, which lets users create playlists based on their listening habits, to include podcasts.Its monthly active users forecast of 778 million exceeded estimates of 773 million, while its prediction for a 6 million increase in premium subscribers to 299 million was below estimates of 302 million.Premium subscribers rose 9 per cent to 293 million in the first quarter. Its MAU net additions of 10 million brought the total to 761 million.

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