Spotify has announced a remarkable increase in profits for the second quarter, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), a notable improvement from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users also surged by 14% year-over-year, reaching 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 highlighted that the growth had surpassed the company’s own projections, which is promising for the future.
Following the release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced price increases for its Premium users in the U.S., starting this month. Individual plan subscribers will see their monthly fee rise by $1 to $12, Duo plan users will pay $2 more at $17, and Family plan fees will increase by $3 to $20. This marked the first membership cost increase in 13 years, with an average hike of $1 implemented last July.
Despite the price hikes, Spotify gained seven million net subscribers during the quarter, exceeding its previous guidance by one million. A recent analysis by Bloomberg indicated that Spotify holds the title of the most popular audio streaming service globally, with its users being the least likely to cancel their subscriptions compared to other audio or video streaming services.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock plummeted by more than two-thirds due to multiple quarters of operating losses. In January 2023, the company announced it would cut 600 jobs, and less than a year later, it reduced its workforce by 1,500 employees, amounting to approximately 17% of its staff.