Spotify Shares Fall 12% Early Tuesday After Earnings Report

Topline

Spotify shares dropped as much as 12% early Tuesday after the leading streaming service reported its first quarter earnings, which included a forecast for Q2 that is below analysts’ expectations despite the platform adding subscribers and boosting revenue in the first months of 2026.

Spotify shares fell early Tuesday. (Photo Illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images)

SOPA Images/LightRocket via Getty Images

Key Facts

Spotify shares are down more than 10% as of 9 a.m. EST in premarket trading, though the stock price fell as much as 12% after the Swedish streaming company reported its first quarter earnings.

The company projected operating income of €630 million ($736 million) for the second quarter of 2026, below analysts’ expectations, which Reuters reported stood at €684 million (nearly $800 million).

The streaming service projects it will total 299 million paid subscribers as of Q2 2026, which Reuters reported is below analysts’ expectations of about 302 million subscribers.

Spotify shares have declined throughout the year, shedding about 15% in value as of Monday’s close price.

How Did Spotify Perform In Q1?

Spotify reported 293 million paid subscribers in the first quarter of 2026, up 1% over the previous quarter and up 9% year-over-year. The streaming service reported 761 million monthly active users, up 12% year-over-year, while total revenue reached €4.53 billion, or about $5.3 billion, up 8% year-over-year. Spotify’s revenue total was in line with analysts’ estimates, Reuters reported, while its operating income of €715 million, or about $835 million, beat expectations. Alex Norström, co-CEO of Spotify, said in a statement the company “delivered on the subscriber growth we aimed to achieve, and saw healthy engagement from existing users, reactivations and new users alike.”

Key Background

Spotify underwent numerous changes this year, including a leadership turnover that saw longtime CEO Daniel Ek, who led the company since he co-founded it in 2006, hand over the reins to Norström and Gustav Söderström as co-CEOs. Ek, whom Forbes estimates has a net worth of $9.6 billion, announced his departure in September and left his post in January, transitioning to an executive chairman role. News of Ek’s departure prompted Spotify shares to fall 4%. The streaming service also announced in January it would hike prices for U.S. subscribers by $1 per month, raising its premium tier from $11.99 per month to $12.99, its first price hike in about 18 months.

How Has Spotify Dealt With Ai?

Spotify, like other streaming services, has also faced pressure from the rise of AI technology in recent months as AI music generators have exploded in popularity. In September, Spotify said it has cracked down on “spammy” tracks that have flooded its service, saying it removed 75 million such tracks over the past year and implemented new spam filter tools. Some artists have alleged the prevalence of AI tracks on streaming services dilutes the royalties paid to artists, though Spotify’s head of artists and industry partnerships Bryan Johnson in June denied the royalty funds are being diluted, saying the consumption of AI tracks is “infinitely small.” But the company has embraced AI in some ways, including the release of an AI-powered DJ that helps users discover music.

Big Number

$11 billion. That’s how much Spotify paid out to artists in 2025, the company said in January, its largest payout ever and an increase of more than 10% over the year prior.