Spotify has announced a record profit for the second quarter, marking a significant turnaround from the previous year when it faced substantial losses. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a considerable improvement from a loss of 247 million euros ($268 million) in the same quarter last year. Additionally, the number of monthly active users surged by 14% year-over-year, reaching 626 million.
Spotify’s CEO, Daniel Ek, expressed optimism 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 indicated that the company’s growth trajectory has surpassed their own expectations, suggesting a promising outlook for the future.
Following the release of the earnings report, Spotify’s stock climbed nearly 14% in pre-market trading.
Earlier this year, Spotify announced a price increase for its Premium plans in the U.S. Starting this month, individual plan subscribers will see a $1 increase to $12, Duo plan users will be charged $2 more at $17, and Family plan prices will rise by $3 to $20. This increase followed the first membership cost adjustment in 13 years in July 2022, which averaged $1.
Despite the price hikes, Spotify welcomed seven million net new subscribers during the quarter, exceeding its own expectations by one million. A Bloomberg analysis noted that Spotify maintains the highest retention rate among audio and video streaming services.
However, the company has not consistently enjoyed financial success, as its stock plummeted by more than two-thirds in 2022 due to multiple quarters of operating losses. Earlier this year, Spotify initiated layoffs, first cutting 600 jobs, and later reducing its workforce by an additional 1,500 employees, accounting for about 17% of its total staff.