Spotify has reported record profits for the second quarter, one year after increasing prices for its Premium plans for the first time. The Swedish audio streaming company posted an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. Additionally, the number of monthly active users rose by 14% to reach 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, stating that Spotify is not only a strong product but is also becoming a formidable business. He noted that their rapid development has exceeded their expectations, which is promising for the future.
The company’s stock surged nearly 14% in pre-market trading on Tuesday following the optimistic earnings report.
In June, Spotify announced price hikes for its Premium users in the U.S. Starting this month, those on individual plans will see an increase of $1, bringing the total to $12. Duo plans will rise by $2 to $17, while Family plans will increase by $3 to $20. This marked the first price adjustment in 13 years, with an average increase of $1 implemented last July. Despite these increases, Spotify managed to add seven million net subscribers during the quarter, surpassing its prior expectations by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service worldwide, with users less likely to cancel their subscriptions compared to those of other streaming platforms. However, the company faced challenges in the past; its stock value decreased by more than two-thirds in 2022 as it navigated multiple quarters of operating losses. In January 2023, Spotify announced layoffs of 600 employees, followed by a further reduction of 1,500 jobs, amounting to about 17% of its workforce less than a year later.