Spotify has reported impressive profits for the second quarter, achieving an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The audio streaming giant also experienced a 14% increase in monthly active users, 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the earnings announcement, Spotify’s stock surged nearly 14% in pre-market trading.
In June, the company announced a price increase for its Premium plans in the U.S. starting this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will face a $3 increase to $20. This marks the first price rise in 13 years for Spotify’s memberships, with a previous average increase of $1 implemented last July.
Despite the price hikes, Spotify added seven million net subscribers during the quarter, exceeding its previous projections by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally and has shown a lower propensity for users to cancel their memberships compared to other audio or video streaming platforms. However, the company’s financial trajectory has not always been smooth; Spotify’s stock plummeted by over two-thirds in 2022 due to several consecutive quarters of losses. In early 2023, the company announced significant layoffs, cutting 600 positions, and less than a year later, it let go of 1,500 employees, accounting for about 17% of its workforce.