Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year when it experienced considerable losses. The Swedish audio streaming service announced an operating income of 266 million euros ($289 million), recovering from a loss of 247 million euros ($268 million) a year prior. The platform’s monthly active users have also surged by 14% year-over-year, totaling 626 million.
CEO Daniel Ek expressed enthusiasm for 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock soared nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its Premium plans in the U.S. Individual plan subscribers will see a $1 increase to $12, while Duo plan subscribers will pay $2 more, bringing their total to $17. Family plan users will see a $3 increase, making it $20. This marked the first price hike in 13 years, which had been raised by an average of $1 last July.
Despite the price hikes, Spotify managed to attract seven million new net subscribers during the quarter, surpassing its own expectations.
As the largest audio streaming service globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company has faced challenges in the past. Spotify’s stock lost more than two-thirds of its value in 2022, and the company underwent several quarters of operating losses, prompting layoffs that saw the reduction of 600 employees in January 2023 and an additional 1,500 jobs later that year, accounting for approximately 17% of its workforce.