Shares of Spotify (SPOT) - Get Spotify Technology SA Report were falling sharply Wednesday after the music and podcast streamer reported second-quarter results that were mixed, missing on monthly average user growth expectations.
The Luxembourg-based company reported 365 million second quarter monthly active users, missing analyst estimates of 371.5 million, despite launching in 85 countries earlier this year.
"We did see a second quarter of greater MAU variability mainly due to ongoing COVID-19 headwinds and a temporary issue related to user intake on a third party platform," the company said in a Wednesday statement.
Spotify reported second-quarter revenue of 2.33 billion euros ($2.75 billion) versus analyst estimates of 2.29 billion euros ($2.7 billion). The company forecast current quarter revenue between 2.31 and 2.51 billion euros and 170 to 174 million premium subscribers.
Analysts are expecting revenue of 2.39 billion ($2.82 billion).
Spotify shares dropped 7.08% to $220.15 per share Wednesday at last check.
Analysts are expecting revenue of 2.39 billion euros ($2.82 billion) and 170.4 million subscribers.
Premium subscribers, which account for most of the company's revenue, hit 165 million in the quarter, matching analyst estimates.
Spotify has been investing in podcasts in recent weeks and now has 2.9 million podcasts on its platform, including the Joe Rogan Experience, which is the most popular podcast in the country.
Total monthly active users rose 22% to 365 million in the quarter. The premium churn rate for the quarter was down 23 basis points year over year.