Spotify has announced a record profit for the second quarter, marking a significant turnaround following a year of challenges. The Swedish audio streaming company reported an operating income of 266 million euros ($289 million), a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm over the company’s performance, 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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in subscription prices for its Premium users in the U.S. Effective this month, individual plan subscribers will see a $1 increase to $12, Duo plan subscribers will pay $2 more for a total of $17, and Family plan subscribers will be charged $3 extra, bringing their total to $20. The company raised its membership costs for the first time in 13 years last July by an average of $1.
Despite these price hikes, Spotify gained seven million net subscribers in the last quarter, exceeding its guidance by one million.
Spotify continues to hold its position as the leading audio streaming service globally, and a recent Bloomberg analysis revealed that its users are the least likely among audio or video streaming platforms to cancel their subscriptions.
However, Spotify has faced financial difficulties in the past, with its stock plummeting by more than 66% in 2022 due to multiple quarters of operating losses. In January 2023, the company announced a plan to lay off 600 employees, and less than a year later, it cut approximately 1,500 jobs, accounting for about 17% of its workforce.