Spotify has announced record profits for the second quarter, marking a significant turnaround from a loss experienced a year prior. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), a dramatic improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% rise in monthly active users, reaching 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 added that the company’s growth trajectory was surpassing expectations, indicating a promising future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its Premium subscription plans in the U.S. Effective this month, individual plan users will pay $12, an increase of $1, while Duo plan users will see their fees rise to $17, up by $2, and Family plan subscribers will now pay $20, an increase of $3. This price hike came after the company raised membership costs for the first time in 13 years last July.
Despite these increases, Spotify managed to add seven million net subscribers in the latest quarter, exceeding its previous guidance by one million.
A Bloomberg analysis indicated that Spotify remains the leading audio streaming service worldwide, with its users showing the lowest propensity to cancel subscriptions compared to other streaming giants. However, Spotify’s financial journey has not been without challenges; in 2022, its stock plummeted by over two-thirds, and the company experienced several quarters of operating losses. To address these financial struggles, Spotify cut 600 jobs in January 2023 and later eliminated an additional 1,500 positions, accounting for about 17% of its workforce.