Spotify has announced record profits for the second quarter, marking a significant turnaround from the previous year when the company reported losses. The Swedish audio streaming platform recorded an operating income of 266 million euros ($289 million) in this quarter, compared to a loss of 247 million euros ($268 million) in the same period last year. Monthly active users also saw a notable increase, growing 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed optimism about the company’s future, 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.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium subscriptions in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more, totaling $17, and Family plan users will experience a $3 increment, now costing $20. This marked the first price increase in 13 years, where the company raised membership costs by an average of $1.
Despite these price adjustments, Spotify managed to gain seven million net subscribers during the quarter, exceeding its own expectations by one million.
Spotify remains the leading audio streaming service globally, with users being less likely to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis. However, the company has faced challenges in the past; its stock plummeted more than two-thirds in value in 2022 amid several quarters of operating losses. This year, the company initiated layoffs, reducing its workforce by 600 employees in January and an additional 1,500 positions, approximately 17% of its staff, less than a year later.