Spotify Stock Sinks on Weaker-Than-Expected Results, Soft Outlook

Spotify (SPOT) shares dropped 7% in premarket trading Tuesday after the Swedish audio streaming giant reported worse-than-expected second-quarter results and issued a mostly disappointing outlook.

The company posted earnings per share (EPS) of 0.42 euros ($0.49) on revenue that rose 10% year-over-year to 4.19 billion euros ($4.85 billion). Analysts polled by Visible Alpha had expected EUR1.82 and EUR4.26 billion, respectively. Last quarter, Spotify had projected Q2 revenue of EUR4.3 billion.

The company said that “outsized currency movements during the quarter” impacted revenue, and that operating expenses rose 8%.

Monthly active users climbed 11% to 696 million. Analysts had estimated 689.4 million MAUs, while Spotify had projected 689 million last quarter.  Premium subscribers increased 12% to 276 million, topping analysts’ expected 273.4 million and Spotify’s prior guidance of 273 million.

For the third quarter, Spotify is projecting EUR4.2 billion in revenue, 710 million monthly active users, and 281 million premium subscribers. Analysts were looking for EUR4.48 billion, 707.2 million, and 279.1 million, respectively.

Spotify shares entered Tuesday up more than 55% this year.