Spotify has announced a new quarter of record profits, marking a significant turnaround after it raised its Premium subscriptions for the first time ever a year ago.
In the second quarter, the Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million), in stark contrast to a loss of 247 million euros ($268 million) in the same period last year. Additionally, the company saw a 14% year-on-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’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 the release of these encouraging earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced new price hikes for its Premium users in the U.S. Starting this month, individual plans increased by $1 to $12, duo plans rose by $2 to $17, and family plans went up by $3 to $20. This marked the first average membership cost increase after 13 years.
Despite these increases, Spotify successfully added seven million net subscribers in the most recent quarter, exceeding its previous forecast by one million.
As the leading audio streaming service globally, Spotify maintains a loyal user base, with a Bloomberg analysis indicating that its users are less likely than those of any competing audio or video streaming service to cancel their memberships.
However, Spotify’s financial journey has not always been positive. The company’s stock suffered a decline of more than two-thirds in value throughout 2022 amid ongoing operational losses. In early 2023, Spotify announced the elimination of 600 jobs and, less than a year later, implemented further job cuts, reducing its workforce by approximately 1,500 positions, or about 17% of its total staff.