Spotify has reported a record profit for the second quarter, marking a significant turnaround from a year ago when the company posted a loss. The Swedish audio streaming platform achieved an operating income of 266 million euros ($289 million), a striking improvement from a loss of 247 million euros ($268 million) in the same period last year. Additionally, Spotify’s monthly active users grew by 14% year-over-year, reaching 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.” He added that the results surpassed the company’s own expectations and bode well for the future.
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscription plans in the U.S., effective this month. Individual plans will now cost $12, up by $1; Duo plans will rise to $17, an increase of $2; and Family plans will now be priced at $20, which is $3 more. This marked the first price increase in 13 years and followed a similar hike last July, where membership costs rose by an average of $1.
Despite the price hikes, Spotify added seven million net subscribers in the last quarter, exceeding its previous guidance by one million. The company has solidified its position as the leading audio streaming service globally, with its members being less likely to cancel subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been positive. The company’s stock value plummeted by over two-thirds in 2022, leading to several quarters of operating losses. In response, Spotify announced layoffs of 600 employees in January 2023, and less than a year later, it cut 1,500 jobs, which accounted for about 17% of its workforce.