Rewrites paragraph 1, adds shares

By Jaspreet Singh

April 29 (Reuters) - Spotify forecast current-quarter operating profit below Wall Street estimates on Tuesday as it grapples with higher payroll taxes, taking the shine off its strong subscriber growth and sending the company's shares down 8% before the bell.

The company's efforts to boost profitability are being closely watched by investors after it benefited in recent years from price increases and cost-cutting initiatives.

Spotify's SPOT.N March-quarter operating profit of 509 million euros also missed estimates due to the higher payroll taxes tied to employee salaries and benefits in some countries.

A rival to Apple AAPL.O and Amazon's AMZN.O music-streaming offerings, Spotify has been leaning on AI features to drive growth. It has expanded its AI Playlist feature, which lets subscribers create personalized playlists from written prompts, to more than 40 new markets.

The company forecast current-quarter monthly active users of 689 million, compared with the average analyst estimate of 684.9 million, according to data compiled by LSEG.

Spotify expects premium subscribers in the second quarter to increase to 273 million, above Visible Alpha estimates of 271.5 million.

The company forecast operating income of 539 million euros ($614.24 million) for the second quarter, below estimates of 557.5 million euros, according to data compiled by LSEG.

"The underlying data at the moment is very healthy. Engagement remains high, retention is strong, and thanks to our freemium model, people have the flexibility to stay with us even when things feel more uncertain," CEO Daniel Ek said.

"The short term may bring some noise, but we remain confident in the long-term story."

Premium subscribers rose 12% to 268 million in the first quarter, beating Visible Alpha estimates of 265.3 million. The company had 678 million monthly active users, above estimates of 671.9 million.

Revenue rose 15% to 4.19 billion euros, slightly below estimates of 4.20 billion euros.

Spotify forecast second-quarter revenue of 4.3 billion euros, in line with estimates.

($1 = 0.8775 euros)

(Reporting by Jaspreet Singh in Bengaluru; Editing by Shounak Dasgupta)

((Jaspreet.Singh@thomsonreuters.com; on X @i_jass))