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Spotify's Spending Plan Hurts Profit Outlook as Europe, North America Growth Lags
Spotify projected 6 million premium subscriber additions for the quarter, below estimates, as investors weighed profitability after shares fell nearly 9% in premarket trading.
- On Tuesday, Spotify forecast second-quarter earnings and premium subscriber growth below analyst estimates, citing slowing expansion in Europe and North America; shares fell 11% in premarket trading.
- Co-CEO Gustav Soderstrom told Reuters that Spotify is investing heavily in marketing and artificial intelligence computing power rather than expanding its workforce, with co-CEO Alex Norstrom leading alongside founder Daniel Ek as executive chairman.
- First-Quarter revenue rose 8% to 4.53 billion euros with record operating income of 715 million euros, yet Spotify expects second-quarter operating income of 630 million euros, falling short of the 684 million estimate.
- Premium subscribers rose 9% to 293 million in the first quarter, but the company's forecast of a 6 million subscriber increase for Q2 falls below the 302 million estimate.
- CFO Christian Luiga said Spotify will ship new features mid-year, driving up operating expenses over coming quarters as the streaming giant competes with Apple and Amazon to improve platform engagement.
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Spotify shares plunge 15% after forecasting second-quarter profit below estimates
Spotify stock fell 15% after the company forecasted lower second-quarter earnings and premium subscribers, despite surpassing first-quarter expectations. It sees revenue of €4.8 billion and continued growth in active users, although premium subscriber projections are slightly below forecasts.
·New Delhi, India
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Times of IndiaReposted by 
The Economic Times
The Economic TimesSpotify expects profit below estimates as North America, Europe growth slows
Spotify's second-quarter outlook falls short of expectations. The Swedish streaming giant anticipates slower growth in Europe and North America. This forecast has led to a dip in its stock value. The company is investing in AI features and marketing. Spotify expects operating income below analyst estimates for the upcoming quarter.
·India
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Coverage Details
Total News Sources12
Leaning Left0Leaning Right2Center7Last UpdatedBias Distribution78% Center
Bias Distribution
- 78% of the sources are Center
78% Center
C 78%
R 22%
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