Spotify has announced another record profit for the second quarter, marking a significant turnaround from a year ago when the company faced substantial losses. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million), compared to a loss of 247 million euros (around $268 million) in the same quarter last year. Additionally, the platform saw a 14% annual increase in monthly active users, reaching 626 million.
In a statement, CEO Daniel Ek expressed enthusiasm about the company’s progress, stating that Spotify is not only a leading product but is also evolving into a commendable business. He noted that the company’s performance has surpassed even its internal expectations, indicating a positive outlook for the future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
Earlier in June, Spotify disclosed plans to increase prices for its Premium subscription plans in the U.S., starting this month. Individual subscribers will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will see their costs rise by $3 to $20. This price hike follows a previous increase last July, their first in 13 years.
Despite these increases, Spotify successfully added seven million net subscribers in the recent quarter, exceeding their prior forecasts by one million. According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with users being less likely to cancel their subscriptions compared to other streaming platforms.
However, the company’s financial journey has not been without challenges. After a significant drop in stock value in 2022, driven by multiple quarters of operating losses, Spotify announced a workforce reduction of 600 employees in January 2023. Less than a year later, the company made another cut, laying off 1,500 staff members, which constitutes about 17% of its workforce.