Spotify has reported another record profit for the second quarter, marking a significant turnaround from a loss in the same period last year. The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) a year earlier. Monthly active users increased by 14% year-over-year, bringing the total to 626 million.
CEO Daniel Ek expressed enthusiasm 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.” He noted that the timeline for their success has exceeded even their expectations.
Following the positive earnings report, Spotify’s stock experienced a nearly 14% surge in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium plans in the U.S. starting this month. Individual plan users will see a $1 increase (now $12), Duo plans will cost $2 more (totaling $17), and Family plans will increase by $3 (now $20). This marked the first price increase for Spotify’s membership fees in 13 years, with a prior average increase of $1 implemented in July.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their memberships compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company has faced challenges in recent years, with Spotify’s stock price dropping over 66% in 2022 amid several quarters of operating losses. In early 2023, Spotify announced layoffs of 600 employees, followed by further cuts of 1,500 jobs, which represented about 17% of its workforce.