Spotify has reported another record profit for the second quarter, a year after its first-ever increase in the price of Premium subscriptions. The Swedish audio streaming service posted an operating income of 266 million euros ($289 million), reversing a loss of 247 million euros ($268 million) from the same period last year. The company also saw its monthly active users grow by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s innovation and growth, 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.” He noted that their progress has surpassed expectations, which is promising for the future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company announced price increases for Premium users in the U.S., with individual plans rising by $1 to $12, Duo plans going up by $2 to $17, and Family plans increasing by $3 to $20. This marked the first price hike for memberships in 13 years, which averaged an increase of $1.
In spite of these price hikes, Spotify managed to gain seven million net subscribers during the quarter, exceeding its previous forecasts by one million. According to a Bloomberg analysis, Spotify remains the leading audio streaming service in the world, with users less likely to cancel their memberships compared to other streaming platforms.
However, the company’s financial journey has had its challenges. In 2022, Spotify’s stock fell by over two-thirds as it encountered multiple quarters of operational losses. In January 2023, the company announced it would lay off 600 employees, and less than a year later, it cut approximately 1,500 jobs, which represents about 17% of its workforce.