Spotify has announced another quarter of record profits, marking a significant turnaround from its financial struggles in previous years. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a remarkable improvement compared to a loss of 247 million euros ($268 million) the same time last year. The number of monthly active users also surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed his enthusiasm for 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 this encouraging earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Beginning this month, individual plan users will see a $1 increase to $12, Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This marked the first price hike in 13 years, with an average increase of $1 last July.
Even with these price increases, Spotify successfully added seven million net subscribers during the quarter, exceeding its previous expectations by one million.
According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with its users showing the least likelihood of canceling their memberships compared to other audio and video platforms.
However, Spotify’s financial landscape has not always been rosy. In 2022, the company’s stock value plummeted by more than two-thirds as it faced several quarters of operating losses. In January 2023, Spotify announced layoffs of 600 employees, followed by further cuts of 1,500 jobs, accounting for approximately 17% of its workforce.