Spotify stock plummets after earnings beat expectations

Key Points:

• Spotify's shares dropped over 13% after market open despite beating earnings estimates, due to cautious guidance for the upcoming quarter.
• The company reported first-quarter revenue of €4.5 billion ($5.3 billion), up 8% year-on-year, and monthly active users (MAUs) increased 12% to 761 million, slightly exceeding expectations.
• Premium subscribers grew 9% to 293 million, adding 3 million net users in the quarter, but Spotify's forecast of 299 million premium subscribers for Q2 fell short of analysts' expectations of over 300 million.
• Spotify's second-quarter guidance includes 17 million net MAU additions and operating income of €630 million, below the Street's estimate of €680 million, with the company noting substantial uncertainty in its outlook.
• The company has raised premium subscription prices, including a recent increase from $11.99 to $12.99 in the U.S., aiming to boost profitability amid mixed growth signals.