Spotify has announced a record profit for the second quarter, marking a significant turnaround for the company. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a major improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also soared by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, stating, “It’s an exciting time at Spotify. We keep on innovating and showing that we aren’t just a great product, but increasingly also a great business. This all bodes very well for the future.” Following the announcement of these positive earnings, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify revealed plans to raise prices for its Premium subscription in the U.S., effective this month. Individual plan prices will rise by $1 to $12, while Duo plans will increase by $2 to $17, and Family plans by $3 to $20. This price adjustment came after the company raised membership fees for the first time in 13 years last July.
Despite the price hikes, Spotify successfully added seven million net subscribers in the quarter, exceeding their projected goal by one million.
As the world’s leading audio streaming service, Spotify users are also the least likely to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis. However, the company’s financial journey has not always been smooth; its stock plummeted by more than 66% in 2022 amid various operational losses. In early 2023, Spotify announced it would cut 600 jobs, a move followed by another reduction of 1,500 employees, representing approximately 17% of its workforce.