Spotify reported record profits for the second quarter, achieving an operating income of 266 million euros ($289 million), a notable improvement from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% year-on-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s growth, 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting this month, individual plan subscribers will see a $1 hike to $12, Duo plan subscribers will pay $2 more at $17, and Family plan users will face a $3 increase to $20. This marked the first price adjustment in 13 years, after an average increase of $1 was implemented last July.
Despite these price hikes, the company added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify users show the lowest propensity to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis. However, Spotify has faced financial challenges in the past; its stock plummeted over two-thirds in value in 2022 due to multiple quarters of operational losses. The company announced significant layoffs, first cutting 600 jobs in January 2023, followed by an additional reduction of 1,500 positions, representing roughly 17% of its workforce.