Spotify has announced a record profit for the second quarter, marking a significant turnaround from a loss reported during the same period last year. The Swedish audio streaming giant generated an operating income of 266 million euros ($289 million), contrasting with a loss of 247 million euros ($268 million) from the previous year. The company also saw a 14% increase in monthly active users, reaching a total of 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 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., effective this month. Individual plan users will now pay $12, a $1 increase, while Duo plans will see a $2 increase to $17, and Family plans will rise by $3 to $20. This was the first membership cost rise in 13 years, with an average increase of $1 implemented last July.
Despite these price hikes, the company added seven million net subscribers in the latest quarter, surpassing its previous forecast by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are the least likely among streaming platforms to cancel their subscriptions. However, the company has faced challenges, including a steep decline in stock value in 2022 and significant job cuts, with 600 employees laid off in January 2023 and an additional 1,500 positions eliminated later in the year, representing roughly 17% of its workforce.