Spotify shares dropped more than 10 per cent on Tuesday after the music streamer issued second-quarter operating income guidance that fell short of analyst expectations. The company forecast operating income of €630mn for the three months through June, below the €673mn analysts had anticipated.

Despite the guidance miss, Spotify reported adding 3mn paying subscribers in the first quarter, bringing its total to 293mn. The streaming group also raised its monthly active users by 10mn to 761mn, beating its own projections. Revenue and profit met market expectations despite implementing price increases earlier this year.

The market reaction reflects investor concerns about how price rises will impact subscriber growth. After a January price adjustment, Spotify now charges $12.99 monthly for its standard US subscription. The company expects to add just 6mn subscribers in the current quarter, reaching 299mn total, falling short of the 302mn analysts projected.

Co-chief executive Alex Norström stated the results reinforce confidence in sustained user and subscriber growth, though the weaker guidance suggests the path to profitability through higher prices may test subscriber acquisition in the near term.