Spotify has announced a record profit for the second quarter, marking a turnaround from the previous year when it reported a loss. The Swedish audio streaming service revealed an operating income of 266 million euros ($289 million) for the quarter, compared to a loss of 247 million euros ($268 million) a year earlier. The number of monthly active users increased by 14%, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, stating that Spotify is not only a great product but also becoming a great business. He noted that the company’s achievements have surpassed even their own expectations, painting a positive picture for the future.
In response to the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
Earlier in June, Spotify announced a price increase for its Premium subscriptions in the United States. Beginning this month, individual plans will cost $12 (up by $1), Duo plans will increase to $17 (up by $2), and Family plans will rise to $20 (up by $3). This marked the first price increase in 13 years, with an average adjustment of $1 last July.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming platform globally, Spotify’s users are reportedly the least likely to cancel their subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the company has faced challenges in the past. In 2022, Spotify’s stock value dropped by more than two-thirds amid multiple quarters of operating losses. In January 2023, the company announced plans to eliminate 600 jobs, followed by a further cut of 1,500 positions, accounting for about 17% of its workforce.