Spotify stock plummeted 12% after disappointing Q2 results, missing revenue expectations and issuing weak guidance. The stock, which hit an all-time high this month, closed at $620. Despite concerns, CEO Daniel Ek remains optimistic about long-term growth, highlighting user and subscriber increases from past initiatives. MAUs rose 11% to 696 million in Q2, exceeding estimates.

Spotify reported Q2 revenue of €4.19 billion, missing analyst expectations, with an adjusted loss per share of €0.42. Operating income fell short due to social charges and expenses. CEO Ek acknowledged challenges in the ads business and emphasized the focus on long-term value creation. Gross margins dipped to 31.5% in Q2, with expectations to drop further in Q3.

Analysts caution that margin expansion may slow this year, partly impacted by renewed deals with major music labels. Spotify executives emphasize expanding gross margins through music, podcast, and audiobook monetization. Despite setbacks, Ek reaffirms the company’s conservative financial guidance and commitment to long-term growth.

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