Spotify has reported yet another record profit in the second quarter, marking a significant turnaround from the previous year when it recorded substantial losses. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a stark contrast to the loss of 247 million euros ($268 million) from the same period last year. Monthly active users also saw a notable increase, growing 14% year-on-year to reach 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 the release of this positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price increases for its Premium subscription plans in the U.S. Effective this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan subscribers will face a $3 increase to $20. This marked the first price adjustment in 13 years, with the company raising membership costs by an average of $1 last July.
Despite these hikes in subscription fees, Spotify successfully added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Bloomberg analysis indicates that Spotify remains the world’s leading audio streaming service and has the lowest cancelation rates compared to other audio or video streaming platforms. However, the road to recovery was not without challenges; Spotify’s stock plummeted by over two-thirds in 2022 amid several quarters of operating losses. The company announced layoffs earlier this year, cutting 600 positions in January and another 1,500 jobs, approximately 17% of its workforce, in less than a year.