Spotify‘s stock price plunged 11.5% on Tuesday (July 29), erasing over $16 billion from the streaming giant’s market capitalization.
One key factor in the tumble: as part of its Q2 earnings today, the company forecast lower-than-expected profits for Q3, partly due to mounting payroll taxes tied to its soaring share price.
All this despite Spotify delivering strong operational results in Q2, with premium subscribers growing to 276 million (up 8 million quarter-over-quarter) and monthly active users reaching 696 million (up 18 million quarter-over-quarter).
However, investors appear to have been spooked by Spotify’s Q3 operating income guidance of €485 million ($550m), which fell well short of analyst estimates around €560 million.
Spotify’s Q2 operating income also fell short of analyst expectations, weighing in at €406 million ($460m) – below SPOT’s own guidance for the quarter.
