Spotify has announced a remarkable surge in profits, reporting an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. The company has also seen a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s progress, stating, “It’s an exciting time at Spotify. We keep on innovating and demonstrating that we’re not just a great product, but increasingly a great business.” He noted that the company has exceeded its own expectations and is optimistic about future prospects.
Following this positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S., which went into effect this month: individual plan users will see an increase of $1 to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will see an increase of $3, bringing the total to $20. This adjustment follows the first membership cost increase in 13 years, which occurred last July.
Despite the price increases, Spotify managed to add seven million net subscribers in the most recent quarter, surpassing its guidance by one million.
Spotify remains the leading audio streaming service globally, with findings from Bloomberg indicating that its subscribers are the least likely to cancel their memberships when compared to other audio or video streaming platforms.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock plummeted, losing over two-thirds of its value due to a series of operating losses. Earlier this year, the company announced job cuts of 600 employees and later laid off 1,500 staff members, accounting for approximately 17% of its workforce.