The stock was down 7.7% to $157 during after-hours trading after closing at $170, up 3.1%, on Wednesday.
The 12-year-old company, which is headquartered in Luxembourg, Sweden, announced its earnings after the closing bell. Spotify reported revenue of €1.14 billion ($1.37 billion), missing analysts' estimate of $1.39 billion, and a net loss per share of €1.01, compared to analysts' estimate of a 39-cent net loss per share.
Spotify also reported 170 million monthly active users, including 75 million premium subscribers and 99 million ad-supported monthly active users, compared with a consensus estimate of 98 million ad-supported monthly active users.
During the investor conference call Wednesday, co-founder and CEO Daniel Ek said that he doesn't see Apple Inc.'s (APPL) growing music subscription service Apple Music providing any "meaningful impact of competition.
"We don't see this as a winner-takes-all market," Ek said, adding that he envisions Spotify and Apple Music both having their own respective places in the growing streaming music market.
The music streaming giant went public on through a unique direct listing on April 3. The stock opened at $165.90 before declining in the afternoon to close at $149.60, still above the New York Stock Exchange's "reference price" of $132.