Spotify has announced a record profit for the second quarter, marking a significant turnaround following its first-ever price increase for Premium plans last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a positive shift from a loss of 247 million euros ($268 million) during the same quarter last year. The company also saw a 14% annual growth in monthly active users, reaching 626 million.
CEO Daniel Ek expressed excitement 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,” adding that their growth has exceeded even their own expectations.
Following the announcement of these better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed it would be increasing the prices of its Premium services in the United States. Beginning this month, individual plan users will see an increase of $1 (to $12), Duo plan users will pay $2 more (totaling $17), and Family plan users will incur a $3 increase (now $20). This marked the first rise in membership fees in 13 years.
Despite these price hikes, the company managed to add seven million net subscribers in the quarter, surpassing its prior forecasts by one million. A Bloomberg analysis indicates that Spotify remains the leading audio streamer globally, with users showing a lower likelihood of canceling their subscriptions compared to other streaming platforms.
However, Spotify’s financial journey has not always been smooth. In 2022, the company’s stock lost over two-thirds of its value due to a series of operational losses. In January 2023, it announced the layoffs of 600 employees, followed by a further cut of 1,500 jobs, accounting for approximately 17% of its workforce less than a year later.