Spotify has reported 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 announced an operating income of 266 million euros ($289 million) for the quarter, compared to a loss of 247 million euros ($268 million) a year prior. The platform’s monthly active users also grew by 14% year-over-year, 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 noted that the timeline for this success exceeded their own expectations, which is promising for the future of the company.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify had announced an increase in Premium subscription prices in the U.S. Beginning this month, individual plan users will see their monthly fees rise by $1 to $12, Duo plan subscribers will pay $2 more for a new total of $17, and Family plan users will see an increase of $3 to $20. This adjustment came after an average price hike of $1 last July, marking the first increase in 13 years.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, surpassing its earlier forecasts by one million.
A Bloomberg analysis highlighted that Spotify remains the leading audio streaming service globally, with its subscribers being the least likely to cancel their memberships compared to other audio or video streaming platforms.
However, Spotify’s financial journey has not always been positive; the company’s stock plummeted by over two-thirds in 2022 due to several quarters of operating losses. In January 2023, the company announced plans to lay off 600 employees, and less than a year later, it reduced its workforce by 1,500 jobs, equivalent to around 17% of its total staff.