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Spotify is another big earnings mover today. You can see the shares bopping around after issuing a disappointing second quarter guidance. They were down as much as 8% pre-market. Looks like that action is continuing here. Our senior reporter, Alexandra Canal, has the results. Hey, Allie.

Hey, Maddie. Yeah, it's all about that guidance which we've heard from a lot of companies this earnings season. And this particular decline in the share price, mostly focused on guidance for monthly active users, otherwise known as MAUs. The company expects 689 million MAUs in the second quarter. That's below the 694 million analysts had expected. And these misses clouded pretty strong user growth that we saw in the first quarter. We had premium subs rise 12% year-over-year. This was actually the strongest Q1 subscriber growth since 2020, and the second highest net addition for any quarter in the company's history. So, strong start to the year, but an acknowledgement here from management that it will be bumpy, especially compared to 2024, when we had a lot of acceleration when it came to subscribers. Also, an aggressive pace of margin expansion. That's all supposed to slow in 2025. Daniel Ek talked about the uncertain macro picture on the earnings call, but he did say that Spotify is well positioned and that the underlying data remains healthy. To that point, Wall Street analysts say that Spotify's really a defensive name, especially given the macro picture, similar to a company like Netflix that has a lot going for it when it comes to its various tiers. It's catering to the super fan, it has audiobooks, has podcasts, and it's relatively cheap. So it holds well in a recessionary environment. On the pricing side of things, Daniel Ek did say that pricing is a part of its strategy, but the company is very careful to enact price increases unless it's delivering value. So I don't know if we should expect any further price increases in the near term, but it's always a lever that the company has as it gets going. But despite the decline in shares today, we are still up about 100% over the past year. And Wall Street, very bullish on this company. You know, it's in growth mode, it's committed to this turnaround plan, it's finally making money. Uh, so really there's this there's this, uh, commentary on Wall Street that we don't need to worry about this report right now, that the long-term, uh, future of this company is still well intact.

So it sounds like Wall Street is anticipating that despite the Q1 gross margin slowing and the year-over-year decline that we saw, that there's that opportunity for, at least for them, to pull price from consumers or extract more value there?

Yeah. They have those levers that they can pull. This is an uncertain backdrop. They're committing to the superfan experience, committing to the creator economy. They just said that they paid out $100 million to podcast publishers. That includes those marquee names like Alex Cooper, Joe Rogan. So they have these other opportunities that they can lean on. And when you talk about the competitive landscape, Spotify is one of the top, uh, performers out there compared to, you know, your Amazon Musics or your Apple Music. Brad, I know you're an Apple Music fan. Totally outing me.

Oh my gosh. I'm a Spotify guy, really.

But, but, but people pay for these things, right? It's that, uh, it's, you know, recession proof in a lot of ways, and again, relatively cheap.

I didn't know that you could have a playlist created based on your ideal BPM as well. That's the AI DJ on Spotify, is great.

Thank you guys so much. Allie, thank you.