Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year. The Swedish audio streaming service announced an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) from a year earlier. Monthly active users increased by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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 its positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for its Premium service in the U.S. Starting this month, individual users will see a $1 rise in their subscription fee to $12, Duo plan subscribers will pay $2 more, bringing their total to $17, while Family plan users will pay $3 extra for a total of $20. This is the first price hike in 13 years, with averages rising by $1 last July.
Despite these price hikes, Spotify gained seven million net subscribers in the last quarter, exceeding its prior guidance by one million.
Bloomberg’s analysis indicates that Spotify remains the dominant audio streaming service globally, with its users being less likely to cancel their subscriptions compared to other streaming platforms. However, the company’s financial journey has had its challenges; in 2022, Spotify’s stock lost over two-thirds of its value due to multiple quarters of operating losses. In January 2023, the business announced a workforce reduction of 600 employees, which was followed by another cut of approximately 1,500 jobs, representing about 17% of its total staff, less than a year later.