Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year when it faced substantial losses. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a stark contrast to a loss of 247 million euros ($268 million) from the same period last year. The number of monthly active users surged by 14% year-over-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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following this positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, the company announced price increases for its Premium subscription plans in the U.S. starting this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will experience a $3 hike to $20. This marked Spotify’s first price increase in 13 years, with an average rise of $1 last July.
Despite these increases, Spotify added seven million net subscribers during the quarter, exceeding its own projections by one million.
Spotify continues to hold its position as the leading audio streaming platform globally, with an analysis revealing that its subscribers are the least likely to cancel their memberships compared to other audio or video streaming services. However, the company’s financial health has had its challenges; Spotify’s stock saw a drop of more than two-thirds in 2022, and the company endured several quarters of operating losses. In January 2023, Spotify announced the elimination of 600 jobs, followed by an additional 1,500 job cuts, which accounted for approximately 17% of its workforce.