Spotify has announced record profits for the second quarter, marking a significant turnaround from a year ago when the company was operating at a loss. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users increased by 14%, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, highlighting ongoing innovations that position Spotify not just as a leading product, but also as a strong business. Following the positive earnings announcement, Spotify’s stock surged nearly 14% in pre-market trading.
The company also announced price increases for its Premium plans in the U.S. starting this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will face a $3 hike to $20. This marks the first increase in membership prices in 13 years.
Despite these price hikes, Spotify added seven million new subscribers in the latest quarter, exceeding its previous expectations by one million. A Bloomberg analysis indicates that Spotify retains subscribers better than any other audio or video streaming service.
However, Spotify has faced challenges in the past, having lost over two-thirds of its stock value in 2022 amidst several quarters of operating losses. Earlier this year, the company announced job cuts, initially laying off 600 employees, followed by a further reduction of 1,500 jobs, representing around 17% of its workforce.