Spotify has announced a record profit for the second quarter, marking a significant turnaround from last year’s losses. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), contrasting with a loss of 247 million euros ($268 million) during the same period in 2022. Monthly active users increased 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. This all bodes very well for the future.” The positive earnings report caused Spotify’s stock to surge nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscriptions in the U.S. Starting this month, individual plans will cost an additional $1, bringing the total to $12, while Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This price hike marked the first increase in 13 years, with an average increase of $1 initiated in July 2022.
Despite the uptick in pricing, Spotify gained seven million net subscribers in the quarter, exceeding its previous expectations by one million. According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with its users being the least likely to cancel their subscriptions compared to other streaming platforms.
However, Spotify’s path hasn’t been without challenges. The company’s stock value plummeted by over two-thirds in 2022 following multiple quarters of operating losses. In response, Spotify announced workforce reductions, laying off 600 employees in January 2023, followed by a further 1,500 job cuts, approximately 17% of its total staff, less than a year later.