Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year when the company experienced losses. The Swedish audio streaming platform generated an operating income of 266 million euros ($289 million), a notable improvement compared to a loss of 247 million euros ($268 million) last year. The company also saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, stating that Spotify is not only recognized as a high-quality product but is also becoming a successful business. He highlighted that the company’s growth timeline has surpassed its expectations, indicating a positive outlook for the future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. The company announced in June that it would raise prices for its Premium plans in the U.S. Starting this month, individuals will pay $1 more, bringing the total to $12; Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This price hike marked the first increase in membership costs in 13 years, with last year’s average increase being $1.
Despite the price adjustments, Spotify added seven million net subscribers during the quarter, exceeding its guidance by one million. The platform remains the leading audio streaming service globally and has low cancellation rates among users, according to a Bloomberg analysis.
However, Spotify has faced financial challenges in the past. In 2022, the company’s stock plummeted by more than two-thirds as it dealt with multiple quarters of operating losses. Earlier this year, the company announced a workforce reduction of 600 employees, followed by an additional cut of 1,500 jobs, representing about 17% of its staff.