Spotify has announced a record profit for the second quarter, marking a significant turnaround from the previous year. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), a notable recovery from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users grew by 14% year-over-year, reaching a total of 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s performance, 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 success has exceeded even its own expectations, indicating a positive outlook for the future.
Following this impressive report, Spotify’s stock saw a notable increase, jumping nearly 14% in pre-market trading.
In June, Spotify announced a price hike for its Premium plans in the U.S. Starting this month, individual plan subscribers will see an increase of $1 to $12, Duo plan users will pay $2 more for a total of $17, and Family plan subscribers will pay $3 extra, bringing their total to $20. This change came after the company raised membership prices for the first time in 13 years, with an average increase of $1 last July.
Despite the increased costs, Spotify managed to add seven million net subscribers in the quarter, surpassing its guidance by one million. A Bloomberg analysis highlighted that Spotify holds the title for the most popular audio streaming service globally, with its users being the least likely among streaming platforms to cancel their subscriptions.
However, it hasn’t always been smooth sailing for Spotify. The company’s stock plummeted over 66% in 2022 due to consecutive quarters of operating losses. In January 2023, Spotify announced it would cut 600 jobs, and less than a year later, it let go of an additional 1,500 employees, representing about 17% of its workforce.