Spotify has announced remarkable profits for the second quarter of the year, marking a notable turnaround from a year ago when the company reported losses. The Swedish audio streaming giant generated an operating income of 266 million euros (approximately $289 million), an impressive recovery from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users reached 626 million, reflecting a 14% annual increase.
CEO Daniel Ek expressed enthusiasm about the company’s innovation and growth, 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.”
In response to the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
Earlier this month, Spotify announced price increases for its Premium subscription plans in the U.S. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will face a $3 increase to $20. This price hike marks the first in 13 years, with an average increase of $1 implemented last July.
Despite the raised prices, Spotify successfully added seven million net subscribers during the quarter, exceeding its own expectations by one million.
Spotify continues to dominate the audio streaming market, maintaining that its users are the least likely among audio and video streaming platforms to cancel their subscriptions, according to a Bloomberg analysis. However, the company faced significant challenges in the past, with its stock losing more than two-thirds of its value in 2022 due to consecutive quarters of operating losses. In response, Spotify has made substantial workforce reductions, laying off 600 employees in January and an additional 1,500 jobs—about 17% of its workforce—less than a year later.