Spotify has announced a record profit for the second quarter, marking a significant turnaround from a year prior. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a stark contrast to a loss of 247 million euros ($268 million) from the same period last year. Monthly active users increased by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s growth, 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 noted that the pace of their progress has surpassed internal expectations, indicating a positive outlook for the future.
Following this favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscribers in the U.S. Starting this month, individuals will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will cost $3 more at $20. This decision followed the first price hike in 13 years, which averaged an additional $1 last July.
Despite the price adjustments, Spotify successfully added seven million net subscribers in the latest quarter, exceeding previous expectations by one million.
As the leading audio streaming platform globally, a Bloomberg analysis revealed that Spotify users are the least likely among streaming services to cancel their subscriptions. However, the company’s financial performance was not always positive; in 2022, Spotify’s stock lost over two-thirds of its value amid several quarters of operating losses. In January 2023, the company began a round of layoffs involving 600 employees, followed by a further reduction of 1,500 jobs, amounting to approximately 17% of its workforce.