Spotify has announced a record profit for the second quarter, marking a significant turnaround from the same period last year when it reported a loss. The Swedish audio streaming giant achieved an operating income of 266 million euros (equivalent to approximately $289 million), compared to a loss of 247 million euros ($268 million) in 2022. Additionally, the company’s monthly active users saw a 14% increase year over year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, highlighting their commitment to innovation and stating, “We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium subscriptions in the U.S. Starting this month, users on individual plans will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This marked the first price hike for the company in 13 years, with an average increase of $1 put into effect last July.
Despite raising prices, Spotify successfully added seven million net subscribers in the last quarter, exceeding its previous forecasts by one million.
As the leading audio streaming platform globally, Spotify has demonstrated resilience with users being less likely to cancel their subscriptions compared to other streaming services, according to a Bloomberg analysis. However, the company faced challenges in 2022, losing over two-thirds of its stock value due to multiple quarters of operational losses. In early 2023, Spotify announced layoffs of 600 employees, followed by additional job cuts of 1,500, representing about 17% of its workforce.