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Spotify shares fell sharply on Tuesday after the music streamer forecast lower subscriber growth and profits, raising concerns that price increases could deter customers.
The streaming group forecast operating income of €630 million for the second quarter, missing analyst expectations of €673 million, as investors watch for signs of how sensitive customers are to price increases.
Spotify said it expected to add 6 million subscribers in the April-June quarter to reach 299 million, missing analyst expectations of 302 million in the closely watched metric.
Shares fell 13.7 percent in early trading in New York.
Spotify, which this year marked 20 years since its founding, has been raising prices around the world while focusing on profitability. After a price increase in January, a standard Spotify subscription costs $12.99 a month in the United States, its largest market.
Shares fell even though Spotify reported it had added 3 million paying subscribers in the first quarter, reaching 293 million, while also meeting expectations on revenue and earnings.
In addition to adding paying subscribers, Spotify increased its monthly users in the first quarter by 10 million, reaching 761 million people, above expectations.
Alex Norström, co-CEO, said the result “reinforces our confidence in sustained user and subscriber growth.”
In a call with investors, Norström said there was “no surprise to us” in how subscribers reacted to the recent price increases.
Executives told analysts on the call that they had remained “very disciplined” on costs and had not significantly increased their workforce since eliminating thousands of jobs three years ago.
The company’s shares have fallen more than 15 percent this year, lagging the broader S&P 500 index.
Spotify has called an investor day next month, its first in four years, where it is expected to set out long-term financial goals and plans for AI.
The company posted net income of €721 million in the first quarter, down from €1.2 billion a year ago but above analysts’ forecast of €620 million. It had 4.5 billion euros in quarterly revenue.
