Spotify has reported a record profit in the second quarter, marking a notable increase from the previous year when it faced losses. The Swedish audio streaming company recorded an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) a year earlier. Additionally, Spotify’s monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism, 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 the company’s progress has exceeded expectations, establishing a positive outlook for the future.
Following the release of this better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium plans in the U.S. Starting this month, individual plan subscribers will pay an additional $1 (totaling $12), while Duo plan users will see an increase of $2 (totaling $17), and Family plan users will pay $3 more (totaling $20). This pricing adjustment followed the first membership cost increase in 13 years, which took place in July 2022.
Despite these price raises, Spotify gained seven million net subscribers during the quarter, exceeding its previous projections by one million.
As the world’s leading audio streaming platform, Spotify has been found to have the lowest cancellation rates among major audio and video streaming services, according to Bloomberg analysis. However, the company faced its challenges, with Spotify’s stock plummeting by over two-thirds in 2022 amid operating losses. In early 2023, Spotify announced layoffs of 600 employees, followed by an additional cut of 1,500 jobs, accounting for about 17% of its workforce less than a year later.