Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year when it faced losses. The Swedish audio streaming company noted an operating income of 266 million euros ($289 million) compared to a loss of 247 million euros ($268 million) a year earlier. The number of monthly active users surged by 14% year-on-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 mentioned that the company’s growth has exceeded their own expectations, indicating a positive outlook for the future.
Following the earnings report, Spotify’s stock saw an increase of nearly 14% in pre-market trading. In June, Spotify announced a price hike for its Premium subscription plans in the U.S. Starting this month, individual users will pay an additional $1 (totaling $12), Duo plan users will see a $2 increase (now $17), and Family plan users will experience a $3 increase (totaling $20). This price adjustment follows a similar membership cost increase last July, which was the first in 13 years.
Despite the increased pricing, Spotify managed to add seven million new subscribers in the quarter—one million more than previously anticipated. The platform remains the most popular audio streaming service globally, and users are reportedly less prone to cancellation compared to other streaming services, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. The company’s stock plummeted by more than two-thirds in 2022 due to multiple quarters of operating losses. Earlier this year, Spotify announced layoffs affecting 600 employees, and less than a year later, the company cut approximately 1,500 jobs, which represents about 17% of its workforce.