Spotify has announced record profits for the second quarter, marking a significant turnaround following its first-ever price increase for Premium plans a year ago. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the number of monthly active users rose by 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.” He noted that the company is ahead of its own expectations, which bodes well for its future.
Following the positive earnings report, Spotify’s stock surged almost 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its U.S. Premium users, effective this month. Individual plan subscribers will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will see a $3 increase to $20. This recent adjustment followed a previous membership cost increase in July 2022, the first raise in 13 years.
Notably, despite the price increases, Spotify managed to add seven million net subscribers in the last quarter, exceeding its previous guidance by one million. A Bloomberg analysis indicates that Spotify remains the most popular audio streaming service globally, with its users being the least likely to cancel their memberships compared to other audio or video streaming services.
However, the financial history of Spotify has not always been positive, as its stock suffered a decline of more than two-thirds in 2022 due to a series of operating losses. The company made significant cuts to its workforce, announcing layoffs of 600 employees in January 2023 and an additional 1,500 jobs, approximately 17% of its total staff, less than a year later.