Spotify has announced a record profit for the second quarter, marking a significant turnaround from last year. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm regarding the company’s growth, 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 favorable earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium subscription plans in the U.S. starting this month. Individual plan users will see an increase of $1 to $12, Duo plan subscribers will pay $2 more at $17, and Family plan users will pay an additional $3, bringing it to $20. This price adjustment followed an average increase of $1 implemented last July, which was the first rise in membership costs in 13 years.
Despite the price increases, Spotify gained seven million net new subscribers in the quarter, exceeding its previous forecasts by one million.
Spotify remains the leading audio streaming service globally, and its subscribers are reportedly less likely to cancel their memberships compared to users of other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company faced challenges in the past; its stock plummeted by more than two-thirds in 2022 amid several quarters of operating losses. Earlier this year, Spotify announced layoffs affecting 600 employees, and later, it reduced its workforce by an additional 1,500 jobs, representing approximately 17% of its total staff.