Spotify has announced record profits for the second quarter, marking a notable turnaround from previous losses. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million), a significant rebound from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also saw a substantial increase, climbing 14% year-over-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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium plans in the U.S., effective this month. Individual plan users will see a $1 increase to $12, Duo plan users will experience a $2 hike to $17, and Family plan users will pay $3 more, amounting to $20. This move followed a previous increase in July 2022, which was the first in 13 years.
Despite the price hikes, Spotify continues to grow, adding seven million net subscribers in the last quarter, surpassing its own projections by one million.
As the leading audio streaming platform globally, a recent Bloomberg analysis indicated that Spotify users are less likely to cancel their subscriptions compared to users of other audio and video streaming services.
However, the company’s financial journey has been challenging. Spotify’s stock lost over two-thirds of its value in 2022 amid multiple quarters of losses. In early 2023, the company announced significant layoffs, first cutting 600 jobs and then a further 1,500, roughly 17% of its workforce.