Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year’s losses. The Swedish audio streaming service recorded an operating income of 266 million euros (approximately $289 million), compared to a loss of 247 million euros ($268 million) one year prior. The company also saw a 14% rise in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism 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.” He added that the company is exceeding its own expectations, which bodes well for the future.
Following the release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, Spotify announced an increase in prices for its U.S. Premium users, effective this month. Individual plans now cost $12, a $1 increase; Duo plans have risen by $2 to $17; and Family plans are up by $3 to $20. This comes after the first price hike in 13 years, which took place last July.
Despite the price increases, Spotify successfully added seven million net subscribers during the quarter, surpassing previous expectations by one million. A recent Bloomberg analysis highlighted that Spotify remains the world’s most popular audio streaming platform and has the lowest cancellation rates compared to other streaming services.
However, Spotify’s financial journey has not always been smooth. The company’s stock value plummeted by over two-thirds in 2022, leading to several quarters of operating losses. In early 2023, Spotify announced the layoffs of 600 employees, followed by the reduction of around 1,500 jobs, or about 17% of its workforce, later that year.