Spotify Technology S.A. shares plummeted 10.03% in pre-market trading on Tuesday after the music streaming giant reported disappointing second-quarter results and provided a weak third-quarter outlook. The company unexpectedly swung to a loss in Q2 and forecasted lower-than-expected profits for Q3, raising concerns about its near-term profitability.

For the second quarter, Spotify reported a loss of 0.42 euros per share, a significant drop from a profit of 1.33 euros per share in the same period last year. This result fell far short of analysts' expectations of 1.95 euros earnings per share. Revenue for the quarter rose 10% to 4.19 billion euros, but still missed the estimated 4.26 billion euros. The company attributed part of its earnings miss to unfavorable currency movements and higher costs, including a 116 million euro charge related to social charges - payroll taxes tied to share-based compensation.

Looking ahead, Spotify's third-quarter guidance further dampened investor sentiment. The company forecast Q3 operating income of 485 million euros, well below the market estimate of 562 million euros. Additionally, Spotify projected Q3 revenue of 4.2 billion euros, falling short of the 4.48 billion euro analyst expectation. Despite the financial setbacks, Spotify did report positive user growth, with monthly active users reaching 696 million and premium subscribers growing to 276 million, both exceeding expectations.