Spotify announced record profits for the second quarter, marking a significant turnaround one year after it implemented its first-ever price hike for Premium subscriptions. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a remarkable improvement from a loss of 247 million euros ($268 million) during the same period last year. The platform also saw its monthly active users rise by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company announced price increases for its Premium users in the U.S., with individual plans rising by $1 to $12, Duo plans increasing by $2 to $17, and Family plans going up by $3 to $20. This marked the first membership cost increase in 13 years, which had averaged $1.
Despite the raises, Spotify gained seven million net subscribers during the quarter, exceeding its previous estimates by one million. A recent Bloomberg analysis highlighted Spotify’s strong position as the leading audio streaming service globally, showing that its users are less likely to cancel their subscriptions compared to those of other streaming platforms.
However, Spotify’s financial journey has been challenging. The company’s stock plummeted by more than two-thirds in 2022 amidst multiple quarters of operating losses. In response to financial pressures, the company announced the layoff of 600 employees in January 2023, followed by another round of cuts affecting 1,500 jobs, approximately 17% of its workforce.