Spotify has reported record profits in the second quarter, marking a significant turnaround from its previous financial struggles. The Swedish audio streaming service posted an operating income of 266 million euros ($289 million), which is a substantial improvement compared to the loss of 247 million euros ($268 million) recorded during the same period last year. The company also saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s direction, highlighting ongoing innovations that enhance both the product and its business viability. Following the release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced its first price increase for Premium subscriptions in the U.S. in over a decade. Starting this month, individual plans will increase by $1 to $12, Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. Despite the price hikes, Spotify gained seven million net subscribers last quarter, exceeding its forecast by one million.
Spotify is recognized as the leading audio streaming platform globally, with users showing a lower propensity to cancel their subscriptions compared to other streaming services, according to a Bloomberg analysis. However, the company faced significant challenges in 2022, losing over two-thirds of its stock value due to ongoing operational losses. In early 2023, Spotify implemented job cuts, reducing its workforce by 600 employees, followed by another reduction of 1,500 jobs, or about 17% of its total staff.