Spotify has announced a record operating profit of 266 million euros (approximately $289 million) for the second quarter, marking a significant turnaround from a loss of 247 million euros ($268 million) reported a year earlier. The company also experienced a 14% year-over-year increase in monthly active users, now totaling 626 million.
CEO Daniel Ek expressed enthusiasm 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, which bodes well for the future.”
Following the announcement of better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify revealed plans to increase prices for its Premium service in the U.S. Starting this month, individual plan subscribers will see a $1 increase to $12, the Duo plan will rise by $2 to $17, and Family plans will go up $3 to $20. This marks the first price adjustment in 13 years, with an average increase of $1 implemented last July.
Notably, despite the price hikes, Spotify added seven million net subscribers in the latest quarter, surpassing its earlier projections by one million. A Bloomberg analysis has shown that Spotify remains the leading audio streaming service globally, with its subscribers being the least likely to cancel their memberships compared to other streaming platforms.
However, Spotify’s financial journey has not always been smooth. The company’s stock plummeted by more than two-thirds in 2022 amid consecutive quarters of operating losses. Earlier this year, Spotify announced a significant workforce reduction, initially laying off 600 employees, followed by another round of cuts affecting 1,500 workers, or around 17% of its total staff.