Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year. The Swedish audio streaming service 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 platform saw its monthly active users increase by 14% year-over-year, reaching a total of 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 earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S. Beginning this month, individual plan users will see an increase of $1, bringing the monthly fee to $12. Duo plan users will pay an additional $2, raising their cost to $17, while Family plan users will now pay $20, a $3 increase. This is the first price adjustment in 13 years, which occurred last July with an average increase of $1.
Despite these increases, the company gained seven million net subscribers during the quarter, exceeding its own forecast by one million.
As the leading audio streaming platform globally, Spotify users are reportedly less likely to cancel their memberships compared to other streaming services, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. Spotify’s stock value dropped by more than two-thirds in 2022, as it reported consecutive operating losses. In early 2023, the company announced layoffs affecting 600 employees, and later cut approximately 1,500 jobs, representing about 17% of its workforce.