Spotify Technology S.A. (NYSE:SPOT) shares are trading higher on Wednesday.

On Tuesday, the company reported mixed first-quarter 2026 results, with revenue missing expectations even as earnings and user growth topped forecasts.

Earnings Beat, Revenue Misses

Spotify reported quarterly earnings of $4.04 per share, beating the analyst consensus estimate of $3.72 per share. Revenue rose 8% year over year to $5.308 billion (4.53 billion euros) but fell short of the $5.36 billion Street estimate.

For the second quarter of 2026, Spotify expects revenue of 4.80 billion euros, or about $5.545 billion, below the consensus estimate of $5.650 billion.

The company projects Premium subscribers to reach 299 million, implying roughly 6 million net additions. Monthly active users are expected to grow to 778 million, representing about 17 million net new users.

Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $607.69. Recent analyst moves include:

  • Goldman Sachs: Buy (Lowers Target to $600.00) (April 29)
  • Guggenheim: Buy (Lowers Target to $565.00) (April 29)
  • Citizens: Market Outperform (Lowers Target to $600.00) (April 29)

Analyst View On Spotify

Keybanc analyst Justin Patterson maintained an Overweight rating and slashed the price forecast from $745 to $680. This reflects the revised profitability outlook.

The analyst writes that Spotify is investing more aggressively from a position of strength, prioritizing discretionary spending to support future growth.

While the analyst expects this to weigh on near-term profitability, leading to an approximate 6% reduction in 2026 and 2027 operating profit estimates, it also increases the potential for upside revisions as returns from these investments materialize, the analyst adds.

This dynamic could create a strong catalyst path, particularly around the May 21 Investor Day and subsequent product updates during the year.

The analyst's revenue projections remain broadly intact, with 2026 estimated at 19.6 billion euros (+14% YoY) and 2027 at 22.8 billion euros (+16% YoY).

However, Patterson reduced operating profit forecasts by about 6% for both years, now expected at 2.9 billion euros in 2026 and 3.9 billion euros in 2027, due to higher operating expenses.

JP Morgan analyst Doug Anmuth slashed the price forecast to $600 (from $700), while keeping an Overweight rating.

The analyst writes that a softer second-quarter profit outlook pressured Spotify shares, subscriber growth skewed to the second half, limited AI product updates, and ongoing ad headwinds.

Despite this, the company is ramping up AI-related spending, with higher training and inference costs likely to be incurred before meaningful revenue contributions.

For 2026, the analyst estimates gross margin of 33.1% (+110 bps YoY), operating margin of 14.3% (+150 bps YoY), and free cash flow of 3.5 billion euros (+22% YoY).

MAU net adds are projected at 79 million (vs. 76 million in 2025), and Premium subscriber additions at 25 million (vs. 27 million in 2025). Anmuth estimates revenue growth of 14% year over year on a constant currency basis, driven by 9% Premium subscriber growth, 6.5% ARPU expansion, and 6% ad growth.

Spotify Price Action

SPOT Stock Price Activity: Spotify Technology shares were up 1.73% at $438.01 at the time of publication on Wednesday, according to Benzinga Pro data.

Photo via Shutterstock