TLDR
- Spotify beat Q1 earnings with EPS of $3.45, topping estimates by $0.51
- Q2 operating income guidance of €630M came in below the €684M analyst estimate
- Premium subscriber forecast of 299M for Q2 missed estimates of 302M
- Ad-supported revenue fell 5% year over year, though rose 3% on constant currency basis
- SPOT stock fell as much as 12% in premarket trading following the report
Spotify beat Wall Street on the top and bottom line in Q1, but investors looked past the headline numbers and focused on what’s coming next — and they didn’t like what they saw.
SPOTIFY $SPOT Q1’26 EARNINGS HIGHLIGHTS
🔹 Revenue: €4.53B (Est. €4.52B) 🟢; +8% YoY
🔹 EPS: €3.45 (Est. €2.95) 🟢
🔹 MAUs: 761M (Est. 759.23M) 🟢; +12% YoY
🔹 Q1 Net Adds: 10M (Est. 3M) 🟢
🔹 Gross Margin: 33.0% (Est. 32.8%) 🟢Q2 Guide:
🔹 MAUs: 778M (Est. 773.9M) 🟢
🔹… pic.twitter.com/CgaW0E7joZ— Wall St Engine (@wallstengine) April 28, 2026
The company reported Q1 revenue of €4.53 billion, up 8% year over year and in line with estimates. EPS came in at $3.45, beating by $0.51. Monthly active users hit 761 million, topping the 756.6 million estimate.
Q1 operating income was a record €715 million, beating the €681.6 million estimate. That record was partly helped by lower payroll taxes, which are tied to Spotify’s share price — and the stock has dropped around 15% this year.
Premium subscribers rose 9% to 293 million in Q1, just below the 294.5 million estimate, with net additions of 3 million during the quarter.
The trouble started with the Q2 outlook.
Spotify guided for Q2 operating income of €630 million — well below the €684 million analysts expected. That’s a sharp step down from the record Q1 figure.
Premium subscriber guidance of 299 million for Q2 also missed, coming in under the 302 million estimate. The company projected only 6 million net subscriber additions.
MAU guidance of 778 million for Q2 did beat the 773 million estimate, showing the free-tier side of the platform remains healthy.
Ad Revenue Under Pressure
The advertising business was a clear weak spot. Ad-supported revenue dropped 5% year over year in Q1. On a constant currency basis it rose 3%, but currency headwinds cut total revenue growth by around 600 basis points.
The softness in ad revenue is drawing attention as Spotify has leaned into its advertising business as a growth driver alongside subscriptions.
Q2 revenue guidance of €4.8 billion was roughly in line with the €4.77 billion estimate, offering little reassurance on the profitability side.
AI Investments Continue
Spotify has been adding AI features across its platform. It expanded its AI DJ voice tool, launched AI Playlist for natural-language playlist creation, and earlier this month extended its Prompted Playlist feature to include podcasts.
Leadership changed at the start of the year. Founder Daniel Ek moved to executive chairman in January, with Gustav Soderstrom and Alex Norstrom now running the company.
Spotify competes with Apple and Amazon in the streaming space.
SPOT shares were down around 12% in premarket trading following the report, and settled around 8% lower as markets opened.
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