Spotify shares dropped 10% after a second-quarter loss and missed revenue expectations. The stock hit an all-time high but fell to $650. Q2 revenue was €4.19 billion, lower than expected. Operating income and guidance also missed estimates due to social charges and expenses. CEO Daniel Ek remains confident in Spotify’s future.

Despite challenges in the ads business, Spotify reported growth in monthly active users and premium subscribers. CEO Daniel Ek acknowledged the slow progress in the ads sector. Gross margins declined to 31.5% in Q2, and are expected to fall further to 31.1% in Q3. Analysts warn of slowing margin expansion.

Spotify executives focus on expanding gross margins through music and podcast monetization. Recent deals with music labels may impact future results. The company maintains a conservative financial philosophy. Alexandra Canal is a Senior Reporter at Yahoo Finance.

Follow her on Twitter @allie_canal, LinkedIn, and email her at [email protected]. For the latest stock market news and analysis, visit Yahoo Finance. Read the latest financial and business news from Yahoo Finance.

Read more at Yahoo Finance: Spotify stock slides on Q2 earnings loss, weaker forecast after record rally