Between the April 27 regular session, when the stock of the music streaming giant Spotify (NYSE: SPOT) fell 4.28% to $495.82, and the April 28 extended session, when it crashed 9.24% to $450, the company’s equity plummeted more than 13% within just 24 hours.
The downturn for SPOT shares came after the company published its latest quarterly earnings.
Though the results were, at face value, positive containing both the revenue beat – at €4.53 billion ($5.3 billion) year-over-year instead of the expected €4.52 billion ($5.29 billion) – and earnings per share (EPS) – which came in at €3.45 ($4.03) rather than €2.95 ($3.45) euros – the other figures were not as impressive.
Spotify stock plummets on disappointing guidance
Specifically, investors appeared most alarmed by Spotify’s guidance that second-quarter (Q2) operating income would come in at €630 million ($736.78 million): substantially lower than the anticipated €684 million ($800 million).
The concerns were further compounded by the fact that the firm received what is likely a one-time benefit to its ‘social charges.’ Indeed, Spotify estimated that these charges – partially linked to share-based pay and affected by market swings earlier in 2026 – came in some €49 million ($57.30 million) lower than expected.
Are Spotify business changes about to turbocharge SPOT stock?
Elsewhere, Spotify’s core business is arguably in flux, considering its adoption of artificial intelligence (AI) technology has, depending on whom one asks, led to substantial excitement or significant anxiety.
While the changes can help increase user engagement and enable the streaming platform to capture more revenue as profits – no payouts to artists are required when users listen to AI-generated music – they simultaneously risk the company’s core appeal.
Similarly, though price hikes are often seen as possible due to their help in generating cash flow, the reemergence of film and TV piracy in the aftermath of platform atomization and increased subscription costs serves as a cautionary tale, especially with rising competition from platforms like YouTube and Apple Music.
Featured image via Shutterstock
