Spotify has reported record profits for the second quarter, a year after it increased the prices of its Premium plans for the first time. The Swedish audio streaming service achieved an operating income of 266 million euros ($289 million), a significant improvement from the loss of 247 million euros ($268 million) during the same period last year. Monthly active users also rose 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock increased nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S., effective this month. Individual plan users will now pay $12, an increase of $1; Duo plan users will see a rise of $2 to $17; and Family plan users will pay $20, up $3. This marked Spotify’s first increase in membership costs in 13 years, which had averaged about $1.
Despite these price adjustments, Spotify managed to gain seven million net subscribers in the quarter, exceeding previous expectations by one million.
Spotify remains the leading audio streaming platform globally, with users less likely to cancel their subscriptions compared to other major streaming services, according to a Bloomberg analysis. However, the company’s financial situation has not always been favorable; Spotify’s stock dropped more than 66% in 2022 due to multiple quarters of operating losses. In early 2023, the company announced plans to lay off 600 employees and later cut an additional 1,500 jobs, which accounts for around 17% of its workforce.