Investing.com -Spotify Technology SA (NYSE: SPOT) reported first-quarter results that exceeded analyst expectations for earnings and revenue, but shares fell 6.8% as the company's operating income guidance for the second quarter came in below Wall Street forecasts.

The audio streaming platform posted adjusted earnings per share of €3.45, beating the analyst estimate of €2.95. Revenue reached €4.53 billion, slightly above the consensus of €4.52 billion and up 8% YoY, or 14% on a constant currency basis. Monthly active users grew 12% YoY to 761 million, surpassing the estimate of 759.23 million and exceeding the company's own guidance of 759 million.

The stock declined following the company's second-quarter guidance, which projected operating income of €630 million, falling short of the analyst estimate of €674.3 million. For the second quarter, Spotify expects revenue of €4.8 billion, slightly above the consensus of €4.77 billion. The company forecasts monthly active users of 778 million, exceeding the estimate of 773.9 million.

Premium subscribers grew 9% YoY to 293 million, in line with both guidance and expectations, adding 3 million net subscribers during the quarter. Premium revenue increased 10% YoY to €4.15 billion, or 15% on a constant currency basis. Ad-supported revenue declined 5% YoY to €385 million, though it grew 3% on a constant currency basis.

Gross margin reached a first-quarter record of 33.0%, up 133 basis points YoY and exceeding the company's guidance of 32.8%. Operating income hit a record €715 million with a 15.8% margin, outperforming guidance of €660 million due to lower social charges and gross margin strength. Free cash flow reached a first-quarter record of €824 million.

"We are pleased with our performance in Q1, as all of our KPIs met or exceeded guidance," the company stated, noting that the business added 10 million MAUs versus guidance for 8 million.