Spotify has announced a new record profit for the second quarter, marking a significant turnaround from the previous year when the company faced substantial losses. The audio streaming giant reported an operating income of 266 million euros ($289 million), improving from a loss of 247 million euros ($268 million) a year prior. Monthly active users also grew by 14% year-on-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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following these positive earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In a move to enhance revenue, Spotify raised its Premium subscription prices in the U.S. starting this month. Individual plan subscribers will now pay $12, an increase of $1. Duo plans will now cost $17, up by $2, and Family plans will rise to $20, an increase of $3. This was the first price increase in 13 years for the company, which raised membership costs by an average of $1 last July.
Despite these price hikes, Spotify successfully attracted seven million net subscribers during the quarter, surpassing its earlier projections by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with its users showing the lowest churn rates compared to other audio and video streaming platforms. However, the company has faced challenges in the past; Spotify’s stock plummeted by over two-thirds in 2022 due to multiple quarters of operational losses. Earlier this year, the company announced layoffs affecting 600 employees, followed by a further reduction of 1,500 jobs, equating to roughly 17% of its workforce.