Spotify has announced impressive financial results for the second quarter, marking a significant turnaround since it raised the price of its Premium plans for the first time in July 2022. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), a stark contrast to the loss of 247 million euros ($268 million) recorded in the same quarter of the previous year. Additionally, the platform saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s performance, 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 earnings report, Spotify’s stock surged nearly 14% in pre-market trading. Earlier this month, the company announced a price increase for its Premium users in the U.S. Effective immediately, individual plans will cost $12, an increase of $1, while Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This price adjustment follows a similar increase in July 2022, the first in 13 years.
Despite the price hikes, Spotify managed to gain an additional seven million net subscribers in the quarter, surpassing its estimates by one million. A Bloomberg analysis indicates that Spotify remains the leading audio streamer globally, with its users exhibiting the lowest likelihood of canceling their subscriptions compared to other streaming services.
However, the company faced significant challenges in the past. In 2022, Spotify’s stock value plummeted by more than two-thirds due to multiple quarters of operating losses. In response, the company reduced its workforce significantly, starting with a layoff of 600 employees in January 2023, followed by an additional cut of 1,500 jobs, representing about 17% of its total staff.