Spotify has announced a record profit for the second quarter, marking a significant turnaround from the previous year when the company experienced losses. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) a year prior. Monthly active users also saw a substantial increase, growing 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed excitement 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 the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S. Starting this month, individual plan subscribers will pay $12, an increase of $1, while Duo plan users will see a price hike of $2 to $17, and Family plan users will pay $20, an increase of $3. This marked the first price adjustment in 13 years, with a similar increase taking place the previous July.
Despite the price hikes, Spotify managed to gain seven million net subscribers in the quarter, exceeding its prior guidance by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with its users showing the least tendency to cancel subscriptions compared to other streaming platforms. However, the company faced challenges in the past, with its stock value plummeting by over 66% in 2022 due to consecutive quarters of operating losses. Earlier this year, Spotify announced the layoffs of 600 employees, followed by an additional cut of 1,500 jobs, which amounted to approximately 17% of its workforce.