Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year. The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the platform saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s progress, highlighting that Spotify continues to innovate and solidify its position not just as a product but also as a formidable business. He noted that the company’s achievements have surpassed their expectations, which is promising for future growth.
Following the release of this positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscription plans in the U.S. Starting this month, individual plan users will see their rates rise by $1 to $12, Duo plan users will pay $2 more for a total of $17, and Family plan subscribers will pay $3 more, bringing the total to $20. This marks the first price increase in 13 years, with an average rise of $1 implemented last July. Despite these hikes, the company added seven million net subscribers this quarter, exceeding its previous guidance by one million.
Spotify maintains its status as the leading audio streaming service globally, with analysis indicating that its users are the least likely to cancel their subscriptions compared to other audio and video streaming platforms. However, Spotify’s financial history has not always been rosy; the company experienced a significant decline in stock value in 2022 due to multiple quarters of operational losses. In early 2023, Spotify laid off 600 employees, and less than a year later, it cut an additional 1,500 jobs, representing about 17% of its workforce.