Spotify (SPOT) shares sank 6% in premarket trading Tuesday after the Swedish audio streaming giant posted first-quarter profit that badly undershot estimates.

The company posted earnings per share (EPS) of 1.07 euros ($1.22) on revenue that rose 15% year-over-year to 4.19 billion euros ($4.77 billion). Analysts polled by Visible Alpha had projected EPS of 2.13 euros, while Spotify last quarter said it expected Q1 revenue of 4.2 billion euros.

Monthly active users climbed 10% to 678 million and premium subscribers increased 12% to 268 million. Last quarter, Spotify guided for 678 million and 265 million, respectively.

For the second quarter, Spotify said it expects 689 million MAUs and 273 million premium subscribers.

“The underlying data at the moment is very healthy: engagement remains high, retention is strong, and thanks to our freemium model, people have the flexibility to stay with us even when things feel more uncertain,” Spotify CEO Daniel Ek said. “So yes, the short term may bring some noise, but we remain confident in the long-term story, and the direction we’re heading in feels clearer than ever.”

Spotify shares entered Tuesday having added a third of their value in 2025. According to Deutsche Bank analysts in a note last week, Spotify’s “ad-supported revenue is more exposed to digital advertising budget cuts, and the weakening dollar is an FX headwind to revenue, though less so for profitability given its costs skew toward USD.”