Spotify has announced a record profit for the second quarter, marking a significant improvement from the losses experienced a year earlier. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), in stark contrast to a loss of 247 million euros ($268 million) from the same period last year. The company also saw a 14% annual increase in monthly active users, reaching a total of 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 of their recent success has surpassed even their own expectations, which he believes is a positive sign for the future.
Following the release of the earnings report, Spotify stock experienced a surge, climbing nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting this month, individual plans will cost $12, up by $1; Duo plans will now be $17, an increase of $2; and Family plans will rise by $3 to $20. This marks the first membership price hike in 13 years for the company. Despite these increases, Spotify successfully added seven million net new subscribers in the quarter, exceeding its prior guidance by one million.
According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with users showing the least likelihood of canceling their memberships compared to other audio or video streaming platforms.
However, the financial trajectory of the company has not always been positive. In 2022, Spotify’s stock plummeted by more than two-thirds as it encountered multiple quarters of operational losses. To manage expenses, the company announced layoffs of 600 employees in January 2023, followed by another round of cuts affecting 1,500 jobs, about 17% of its workforce, less than a year later.