Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year when it posted a loss. The Swedish audio streaming company announced an operating income of 266 million euros ($289 million), a stark contrast to the loss of 247 million euros ($268 million) recorded a year earlier. The number of monthly active users surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s growth and innovation, highlighting that Spotify is not only delivering a great product but is also proving itself as a robust business. This optimistic outlook contributed to a nearly 14% rise in Spotify’s stock during pre-market trading following the announcement of these impressive earnings.
In June, Spotify revealed plans to increase its Premium subscription prices in the U.S. Starting this month, the cost for individual plans will rise by $1 to $12, Duo plans will increase by $2 to $17, and Family plans will see a $3 hike to $20. This price adjustment comes a year after the company raised its membership rates for the first time in 13 years, with an average increase of $1.
Despite these increases, Spotify managed to add seven million net subscribers in the quarter, surpassing its previous guidance by one million. According to a Bloomberg analysis, Spotify remains the leading audio streaming platform globally, with users demonstrating a lower likelihood of canceling their subscriptions compared to other streaming services.
However, the company’s financial journey has not always been positive. Spotify’s stock value plummeted by more than two-thirds in 2022 as it dealt with consecutive quarters of losses. In early 2023, the company announced job cuts affecting 600 employees, and less than a year later, it further reduced its workforce by 1,500, roughly 17% of its total staff.