Spotify has announced a record profit for the second quarter, marking a significant improvement from the previous year’s losses. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), a stark contrast to the loss of 247 million euros ($268 million) it faced a year prior. The company’s monthly active users also saw a notable growth of 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about 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 release of its strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
Earlier this year, Spotify announced a price increase for its Premium plans in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more at $17, and Family plan users will have an increased cost of $3, bringing it to $20. This marked the first price hike for Spotify in 13 years, with the previous adjustments averaging $1.
Despite these increases, the company added seven million net subscribers in the quarter, surpassing its own expectations by one million.
Spotify remains the leading audio streaming service globally, and a Bloomberg analysis highlighted that its users are less likely to cancel their memberships compared to users of other audio and video streaming platforms. However, the company has faced challenges, suffering a decline of over two-thirds in stock value in 2022 due to multiple quarters of operational losses. Earlier this year, Spotify announced layoffs of 600 employees, followed by a further reduction of around 1,500 jobs, amounting to approximately 17% of its workforce.