Spotify has announced a record profit for the second quarter, marking a significant turnaround from the previous year when the company reported a loss. The Swedish audio streaming service achieved an operating income of 266 million euros ($289 million) this quarter, a remarkable improvement from a loss of 247 million euros ($268 million) a year earlier. The platform’s monthly active users increased by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed his enthusiasm for 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 its positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium plans in the U.S., marking the first such hike in 13 years. Starting this month, individual plan users will see an increase of $1, bringing the cost to $12 per month. Duo plan subscribers will pay $2 more, totaling $17, while Family plan subscribers will face a $3 increase, raising the cost to $20.
Despite these price adjustments, Spotify successfully added seven million net subscribers in the last quarter, surpassing its earlier projections by one million users.
Spotify remains the leading audio streaming platform globally and, according to a Bloomberg analysis, its users are the least likely to cancel their subscriptions compared to other audio and video streaming services. However, the company has experienced financial challenges in the past, with its stock value plummeting by more than two-thirds in 2022 due to several quarters of losses. In early 2023, Spotify announced a staff reduction of 600 employees, followed by a significant layoff of 1,500 employees, representing approximately 17% of its workforce.