Spotify has reported a record profit for the second quarter, marking a significant turnaround from a loss reported a year ago. The Swedish audio streaming service achieved an operating income of 266 million euros (approximately $289 million), compared to a loss of 247 million euros ($268 million) for the same period last year. Additionally, the company’s monthly active users rose by 14% year-over-year, reaching a total of 626 million.
CEO Daniel Ek expressed optimism about the company’s growth, 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.
In June, Spotify announced price increases for its Premium plans in the U.S. Effective this month, individual plan users will pay an additional $1, raising the cost to $12 per month, while Duo plan users will see a $2 increase to $17, and Family plan users will pay $3 more, totaling $20. Last July, the company raised prices for the first time in 13 years by an average of $1.
Despite these price hikes, Spotify added seven million net subscribers in the quarter, exceeding its prior guidance by one million. A Bloomberg analysis highlighted that Spotify remains the leading audio streaming service globally, with its users demonstrating the lowest tendency to cancel their subscriptions compared to other audio and video streaming services.
However, the company’s financial journey has not always been smooth. Spotify’s stock value plummeted by more than two-thirds in 2022 as it dealt with multiple quarters of operating losses. In January 2023, the company announced plans to lay off 600 employees, and less than a year later, it cut 1,500 jobs, which constitutes roughly 17% of its workforce.