Spotify's ad-supported revenue falls, premium subscription growth drives mixed Q1 results and stock drop.

Spotify's Q1 2026 earnings showed strong growth in its Premium subscription segment with revenue up 10% and improved margins, driven by subscriber gains and price hikes. However, the Ad-Supported segment revenue declined 5%, highlighting challenges in that business model. Despite beating EPS estimates by nearly 17%, Spotify's shares dropped over 15% in a week, reflecting market concerns about ad revenue and valuation. Investors will watch Spotify's May 21 Investor Day for clues on future pricing and subscription strategies.