Spotify has announced a record profit for the second quarter, marking a significant turnaround since it increased the prices of its Premium plans for the first time last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for this quarter, compared to a loss of 247 million euros ($268 million) during the same period the previous year. Monthly active users also saw a substantial rise, growing 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed enthusiasm about the company’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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading early Tuesday.
In June, Spotify announced a price increase for its Premium plans in the U.S., effective this month. Individual plan users will see a $1 increase, bringing the cost to $12, while Duo plan users will pay $2 more at $17, and Family plan users will experience a $3 increase, raising the price to $20. This adjustment followed a price hike last July, which marked the first increase in membership costs in 13 years by an average of $1.
Despite these price hikes, Spotify managed to add seven million net subscribers in the quarter, surpassing its initial guidance by one million.
A Bloomberg analysis also highlighted Spotify’s position as the world’s leading audio streamer, noting that its users are the least likely among audio and video streaming platforms to cancel their subscriptions.
However, Spotify’s financial history has not always been favorable; in 2022, its stock value plummeted by more than two-thirds as the company experienced multiple quarters of operational losses. In early 2023, Spotify announced it would lay off 600 employees, and less than a year later, it made further cuts by reducing its workforce by 1,500 jobs, equating to about 17% of its total staff.