Spotify's stock drops 8% due to lower user guidance, despite positive long-term outlook

From Yahoo Finance: 2025-04-29 06:18:00

Spotify (SPOT) reported lower user guidance, leading to an 8% drop in shares. First-quarter MAUs increased 10% to 678 million, with 268 million premium subscribers. CEO Daniel Ek expressed confidence in the company’s long-term prospects despite short-term challenges.

Wall Street views Spotify as a defensive play amid macroeconomic uncertainty. Shares hit all-time highs in February but remain up 106% over the past year. In 2022, the company reported its first full year of profitability and achieved record revenue and cash flow figures.

Spotify’s stock surge follows significant business changes, including reduced podcast investments and a shift in content focus. The company paid over $100 million to podcast creators in Q1 and set ambitious goals for future growth and profitability.

Spotify raised prices, introduced new subscription plans, and reported a Q1 margin of 31.6%. Analysts anticipate slower margin expansion this year and potential impacts from renewed music label deals on future results. Advertising revenue will be closely monitored in light of economic uncertainties.

Analyst Alexandra Canal covers Spotify’s latest updates and financial performance. Follow her for more insights on the company’s trajectory in the market. 1. The stock market experienced a sharp decline today, with the Dow Jones Industrial Average dropping over 500 points. Investors are concerned about rising inflation rates and uncertainty surrounding Federal Reserve policies.

2. A new study reveals that the COVID-19 vaccine is highly effective in preventing hospitalizations and deaths from the Delta variant. Researchers emphasize the importance of widespread vaccination to curb the spread of the virus.

3. Tesla announces plans to build a new factory in Texas, marking the company’s first manufacturing plant in the state. The facility will produce electric vehicles and batteries, creating thousands of jobs in the area.

4. The United Nations reports that global temperatures are on track to exceed the 1.5°C target set in the Paris Climate Agreement. Scientists warn of catastrophic consequences if urgent action is not taken to reduce greenhouse gas emissions.

5. In entertainment news, Netflix announces a new original series starring A-list actors, set to premiere next month. The show is already generating buzz for its star-studded cast and intriguing plotline.

Read more: Spotify stock falls 8% on disappointing Q2 user guidance