Spotify announced impressive profits for the second quarter, marking its first price increase for Premium plans one year ago. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) in the same quarter last year. The platform also witnessed a 14% year-over-year rise in monthly active users, totaling 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, highlighting Spotify’s continuous innovation and its transition into a successful business. He mentioned that the growth has surpassed their initial expectations, indicating a promising future for the company.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company had announced price hikes for its U.S. Premium subscribers, where individual plans increased by $1 ($12 total), Duo plans by $2 ($17 total), and Family plans by $3 ($20 total). This marked the first membership cost increase in 13 years.
Despite the price adjustments, Spotify managed to add seven million net subscribers in the latest quarter, exceeding its prior guidance by one million. A recent Bloomberg analysis revealed that Spotify remains the leading audio streaming service worldwide, with users being the least likely among major streaming platforms to cancel their subscriptions.
However, Spotify’s journey hasn’t always been smooth. The stock lost over two-thirds of its value in 2022 due to multiple quarters of operational losses. In early 2023, the company announced a reduction of 600 jobs, followed by further layoffs affecting 1,500 employees, approximately 17% of its workforce.