Spotify Technology S.A. (SPOT) shares tumbled 7.13% in pre-market trading on Tuesday following the release of its second-quarter earnings report and third-quarter outlook. The music streaming giant's forecast for both profit and revenue in the upcoming quarter fell short of Wall Street expectations, overshadowing positive subscriber growth.

For the third quarter, Spotify expects an operating income of 485 million euros ($561.05 million), significantly below analysts' estimates of 562 million euros. The company attributed this lower forecast to higher taxes related to employee salaries. Additionally, Spotify projected third-quarter revenue of 4.2 billion euros, which also missed the market expectation of 4.48 billion euros.

Despite the disappointing outlook, Spotify reported some positive metrics. The company's premium subscribers rose 12% to 276 million in the second quarter, surpassing estimates of 273.4 million. Monthly active users (MAU) also exceeded expectations, reaching 696 million with a net addition of 18 million. However, these growth figures were not enough to offset concerns about the company's profitability. In a move that may be aimed at boosting investor confidence, Spotify's board approved a $1 billion increase to its existing share repurchase program, raising the total authorization to $2 billion.