Spotify’s stock price fell more than 12% on Tuesday (April 28) following guidance from executives that the company expects lower operating income in the second quarter as they invest in technology, AI and marketing.

The streaming giant’s stock was trading around $434 after reporting first-quarter earnings that beat company guidance on nearly all metrics. Monthly active users (MAUs) rose by 10 million in the quarter to a total of 761 million, driven by a 14% increase in ad-supported MAUs and a 9% increase in premium subscribers. Revenue topped 4.5 billion euros ($5.3 billion) on 10% growth in subscriber revenue, and operating income of 715 million euros ($821 million) beat guidance by 55 million euros ($63.2 million) due to lower-than-expected social charges, giving the company an operating margin of 15.8%.

Investors reacted negatively to a piece of the company’s forward-looking guidance that called for 630 million euros ($723.4 million) of operating income in the second quarter, with 10 million euros ($11.5 million) in expected social charges and elevated operating expenses for the next two quarters as Spotify invests in technology, AI and marketing. While that figure is down from the first quarter, Spotify executives said they expect second-quarter revenue of 4.8 billion euros from an additional 17 million monthly active users, for a total of 778 million MAUs.

“Based on the … operating income outlook, we’re not surprised to see shares trading down,” analysts at Citi Research wrote in a note to investors.

Here is how Spotify’s executives explained the outlook on a call discussing their quarterly financial results with analysts and investors.

Operating Income

Spotify CFO Christian Luiga said the company’s forecast for 630 million euros ($723.4 million) in operating income in the second quarter takes into account plans for marketing new features and research and development related to strategic AI initiatives.

“We continue to expect to improve in 2026 on a full-year basis, with quarterly progression being variable depending on the timing of our investments,” Luiga said. “As we continue to reinvest in our future growth potential, we remain really well positioned to continue compounding growth and profitability.”

Spotify co-CEO Alex Norström also struck a note of optimism, describing how investments in tech are allowing the company to issue updates and fixes to Spotify’s platform faster than before.

“We are spending more compute per employee, and that is because we’re seeing tremendous return in terms of productivity,” Norström said.

Advertising

Ad-supported MAUs rose by 14%, but overall ad-supported revenue fell 5% in the first quarter compared to a year ago. Excluding the effects of foreign exchange rates, the company says ad-supported revenue rose by 3%.

Ad revenue was hurt in part because several million euros in revenue previously accounted for in the ad-supported segment was shifted into Spotify’s premium segment. However, Norström also acknowledged Spotify’s ad revenue business has been a “work in progress,” saying the company rebuilt the foundation of that division’s technology over the past 18 months.

“We had to essentially rebuild the entire stack, and we did that knowing that we would face a bunch of short-term pressure, but that it would unlock meaningfully much bigger market for us in the long term,” Norström said.

Spotify’s updates focused on automated sales, so-called biddable exchanges and programmatic advertising. Automated sales contributed a third of all ad revenue in the first quarter, and executives said it will offset the uneven pace of other revenue from legacy direct channels.

These sales channels produce more revenue when Spotify ad-supported users spend more time there listening to and watching content, which Norström said is happening.

“Since the global rollout of our more personalized free experience, users in key markets like the U.S. are listening and watching more days per month,” Norström said.

Another new album cycle for Olivia Rodrigo, another No. 1 debut on the Billboard Hot 100 for its lead single.

After “Drivers License” (from Sour) and “Vampire” (from Guts) both led off their respective eras by entering atop Billboard‘s marquee songs chart, on this week’s Hot 100 (dated May 1), Rodrigo makes it three-for-three with the No. 1 bow of “Drop Dead,” from her upcoming You Seem Pretty Sad for a Girl So in Love album. The song’s first-week performance was assisted by a full promotional push, including the release of multiple different variants of the song and its music video.

How big a deal is Olivia’s third straight No. 1-debuting lead single? And does it presage a particularly major turn in direction for upcoming album? Billboard staffers discuss these questions and more below.

1. Olivia Rodrigo debuts atop the Hot 100 for the fourth time in her career with the lead single “Drop Dead” from her new upcoming album You Seem Pretty Sad for a Girl So in Love. Is this a major career accomplishment for her, or is it just business as usual for one of the biggest new stars of the 2020s?  

Kyle Denis: Business as usual. But it was fun to watch one of the biggest new stars of the 2020s sweat a little bit to beat out Ella Langley’s “Choosin’ Texas.” 

Annie Harrigan: Is it a cop out to say both? Rodrigo is three for three in terms of chart-topping lead singles, that is an incredible accomplishment. Killing it on the charts has also become par for the course for the Gen-Z icon. I’m both very happy for her and not at all surprised. 

Lyndsey Havens: It feels like a major accomplishment, though an expected one for Rodrigo. With each album, more than anything she has proven to be a very consistent hitmaker — and considering how high she set the bar with her debut single “Drivers License,” she’s even made it look easy. That said, it’s worth noting that “Drop Dead” did come with a handful of versions for fans to consume, helping boost it to its top spot, but that hardly takes away from it landing there anyway.

Rebecca Milzoff: It’s not a huge shock considering Olivia’s profile, but it feels like an at least notable achievement considering that, this time around, the stakes were a bit higher than usual: she was up against Ella Langley’s historic monster hit “Choosin’ Texas” atop the chart, with a different Olivia (Dean) close behind.  

Andrew Unterberger: Business as usual, and business is good.

2. Does the sound and feeling of “Drop Dead” portend a major shift in direction for Rodrigo to you, or is it fairly natural evolution from her last two lead singles? 

Kyle Denis: This definitely feels like a natural evolution from the last two lead singles. The chorus of “Vampire” alone promised a less ballad-heavy Rodrigo, and Guts delivered on that. In fact, “Drop Dead” isn’t worlds away from the spunky midtempos (“Pretty Isn’t Pretty” and “Love Is Embarassing”) that help close out her sophomore album. 

Annie Harrigan: I think “Drop Dead” is a natural evolution in Rodrigo’s sound from “Drivers License” and “Vampire” for sure. I think one thing Rodrigo does really well is a buildup in a song. Across all three lead singles, she starts off pretty pulled back, and as the song continues, the sound gets bigger and bigger and explodes into a big cinematic moment production-wise. In “Drop Dead,” I think that big instrumental explosion is the most upbeat it’s been yet, and I love how it continues into the talk-singing second verse. I think “Drop Dead” shows a growth in her sound without completely shifting to something unbeknownst to her and her fans — it’s new but still on-brand. 

Lyndsey Havens: Until just now, I forgot “Vampire” was the lead single on Guts. To me, that signals that “Drop Dead” might not indicate any major shifts… While “Drivers License” and “Vampire” were both hits in their own right, I wouldn’t argue that their sound defined their respective albums (Sour and Guts). Rather, it seems Rodrigo uses her lead single to wow the crowd — be it with her songwriting, vocals or emotive production — but never to necessarily reveal all that’s still to come.

Rebecca Milzoff: Nah, it feels like a natural evolution. Olivia’s songs as typically fall into one of two camps — the more downtempo, introspective tracks showcasing her songwriting chops, and the angstier, guitar-driven ones showing she can rock out. “Drop Dead” feels like perhaps a bit of a happy medium between the two vibes, but while its bridge has an enjoyable girls-with-electric-guitars moment), but with its dreamy, ultra-romantic vibe ultimately leans more in the former direction, as both “driver’s license” and “vampire” have.  

Andrew Unterberger: It’s a natural evolution, but it’s also a bit of a swerve — particularly in that title, which seemed designed to elicit eye rolls for its implied third straight trip to post-breakup kiss-off territory, and turned out to be a total red herring for what the song actually is. It’s definitely a clever choice for a first single back after a few years.

3. Rodrigo has been extremely involved in the promotion of “Drop Dead,” giving radio interviews, making a surprise Coachella appearance alongside Addison Rae, popping out at Brooklyn open mics and releasing multiple different variants of both the single and its music video. Does it feel like the right promo strategy for the new song, or does it feel like too much already with the full Pretty Sad album still a month and a half away?  

Kyle Denis: I think it’s the right strategy. It may feel like a lot of Olivia in one week — because it is — but it’s not like she’s a pop star who purposely remains present and in our face between albums. It’s been a minute since she’s been outside, and she’s got an updated aesthetic and sound to alert the general public of. And, for what it’s worth, they’re mostly real boots-on-the-ground promo tactics — and I could never get tired of that in this digital hellscape.

Annie Harrigan: In today’s fast-paced trend cycle where audiences forget things quickly, I think Rodrigo continuously popping up in these different spaces is a super fun way to keep fans engaged, promo the single and just build excitement for the album to come. I think those types of promotional tactics are always great (maybe in part because it gives me something to write about as a music news writer).

However — and people might hate me for this one — I’m getting variant fatigue. I actually don’t think we need three, four, five different versions of the same song or album. This, of course, doesn’t include remixes where new verses or features are added and there’s a real difference between the original and new version. But when it’s practically a copy-paste of the OG work just with a slightly different title, different video or different cover art, I think it’s doing too much and, to me, reads as a ploy to drum up streams. 

Lyndsey Havens: I love it all and think it’s a super fun and engaging way to launch an album cycle — I also think we have to consider the title and what potentially inspired these songs… and in doing that, it feels quite natural that Olivia would want to be out and about and quote unquote moving on. So no, I don’t think it’s too much at all. But I can’t help imagining how more of a roaring song like “Good 4 U” would have sounded alongside Addison at Coachella or stripped down at an open mic in Brooklyn… I’m not sold that “Drop Dead” was the right song for these surprise appearances, but hey it’s clearly working.

Rebecca Milzoff: It does feel like….a lot — especially for a single that does not feel like a radical departure or reintroduction — and pretty squarely aimed at making this No. 1 debut happen. It also feels worth noting to me that in fall of last year, Olivia parted ways with her longtime team at Lighthouse Management and now has an in-house executive team; that could mean we’re seeing more of her new managers’ strategy here, or even more of Olivia’s input. Regardless, whether joining Addison at Coachella, showing up at Pete’s Candy Store in Brooklyn or running through Versailles in ten different ways, she does look like she’s genuinely having fun!

Andrew Unterberger: I’ll be the 18th person to say that it’s been “a lot” of Olivia — certainly more than I expected. But then again, given some recent trending towards big artists not releasing any advance songs from an album, I do appreciate an artist who really commits to a lead single and gives it the full push. And hey, shout out Pete’s Candy store; always cool when a massive pop-rock star shows up to perform at a venue where you played team trivia a few months back.

4. What’s one hope you have for the full Pretty Sad album once that arrives in June?

Kyle Denis: I’d love to hear a Born to Die-esque ballad from Olivia on this new album. Something really grand and cinematic with robust strings and synths, maybe with a trap breakdown in the second half just because. Let’s hear her really explore her lower register while we’re at it. Someone call up Emile Haynie! 

Annie Harrigan: I don’t expect it to happen considering the trend she’s set so far with her past two albums, but it would be cool to see Rodrigo have a feature or two on Pretty Sad. I think she has an incredible voice, and I would love to see how that voice would play with someone else’s, especially another powerhouse vocalist, in a duet. Chappell Roan did backing vocals for Rodrigo in the past, I’d love to see the two of them shine on a track together, written with Rodirgo’s pen.

Lyndsey Havens: Give us Ragerigo. I would love at least one song that totally goes off and shows the other side of sadness (anger), especially when we know Olivia can deliver that so well with crushing guitars and angsty wails. 

Rebecca Milzoff: I’m a lady of simple tastes when it comes to Olivia: she could probably continue churning out ’90s-channeling pop-rock forever and I’d be totally on board, it’s a thing I am very into and that she excels at! But I’m intrigued by the potential influence of her new bud Robert Smith and the “Just Like Heaven” reference on “drop dead” as possible hints at where the album could go.  If this album is indeed going to trace the narrative of a relationship, as rumors have had it, few bands portrayed everything from first-blush romance to total heartbreak and despair as well as The Cure; I wouldn’t be mad at hearing that aesthetic influence throughout. 

Andrew Unterberger: Too greedy to ask for a meeting of the Olivias? (Dean sounded pretty good on another recent hit rock collab.) Failing that, I’d love to hear more of the Joni Mitchell-inspired sound she teased on “Girl I’ve Always Been” from the Spilled deluxe edition of Guts.

5. Over 25 years into the 21st century, Olivia Rodrigo is still the only artist born after Y2K to notch multiple No. 1 hits. Who do you think might be the first to join her in that club?

Kyle Denis: I think the most obvious answer is Billie Eilish but given Tate McRae’s recent blockbuster tour and pop radio domination, I could see the Canadian sensation notching her second No. 1 hit first.  

Annie Harrigan: First of all, I was today year’s old when I learned this fact about Rodrigo; I assumed Billie Eilish also would’ve had multiple No. 1 hits by now. And I do think if anyone is going to join Rodrigo, it’s going to be the 10x Grammy and 2x Academy Award winner.   

Lyndsey Havens: I think Tate McRae could get there, for sure. I’m also going to throw Sombr’s name into the ring… Sure, he still needs to do it once, but I think after he unlocks that top spot, he’ll become a repeat visitor in no time. 

Rebecca Milzoff: It’s surprising to learn that Billie Eilish only has one, but my money would be on her.  She’s had seven Hot 100 top 10 hits, including “Birds of a Feather” and “Therefore I Am” both reaching No. 2 and “Lunch” No. 5, so she’s no stranger to being in the vicinity of No. 1. Add to that her prolificness and perpetual presence in major awards conversations — her Grammy wins in particular are starting to feel inevitable — and it seems like only a matter of time before more No. 1s follow.

Andrew Unterberger: Tate McRae and Billie Eilish are both strong bets, but my money’s on the former being more driven to actually get it done. And though she’s had a No. 1 already, it was with a feature appearance on a Morgan Wallen song; I’m betting she’s properly motivated to get one with her name starring solo on the marquee.

Plus Media Music has signed an exclusive deal with Elite Media and Marketing (EMM) to expand the reach of Cuban urban artists, the companies shared in a joint Instagram post on Monday (April 27).

The strategic agreement between the growing independent label — which has a roster of popular Cuban urban artists including Dale Pututi, Nesty, Wow Popy and Zurdo MC — and Pablo Casal’s 360 entertainment company will include booking, label services, distribution and management.

“Cuban artists lack many things: order, management, strategy, reach, and connections — and that is precisely what we aim to achieve with EMM,” Maykel Barzagas, CEO of Plus Media, tells Billboard. “At the same time, Plus Media possesses the existing structural framework for the Cuban music network. We have the artists’ trust and a positioning infrastructure, and we are joining forces with EMM to scale to the next level through our ecosystem — specifically, to figure out how to organize this genre and community, as we are currently very scattered. Cuban artists have the ‘street cred,’ but they lack the experience within the industry.”

Under the new deal, Barzagas aims to help Plus Media artists gain more exposure, be elevated to bigger stages, secure collaborations with international artists and enjoy better professional management.

“We have received proposals from many major record labels — but the one that truly inspired us the most was the commitment to, and love for, Cuban music that Pablo demonstrated”, Barzagas says. “He is an eternal devotee of Cuban music and has been working with Cuban artists in one way or another for a long time. The commitment and empathy he showed toward us were what led us to forge this alliance; he shares our vision and our desire.”