Spotify has announced record profits for another quarter, 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) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a notable 14% increase in monthly active users, 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. This all bodes very well for the future.”
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, Spotify announced price hikes for its Premium services in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more for $17, and Family plan users will face a $3 increase to $20. This marked the first price adjustment in 13 years for the company, which raised membership costs by an average of $1 last July.
Despite these increases, Spotify successfully added seven million net subscribers in the quarter, exceeding its previous expectations by one million. According to a Bloomberg analysis, Spotify remains the leading audio streamer globally, with users being the least likely to cancel their subscriptions compared to other streaming giants.
However, Spotify’s financial journey has not always been smooth. The company’s stock value plummeted by more than two-thirds in 2022 due to several quarters of operating losses. In early 2023, Spotify announced staff cuts of 600 employees, followed by another reduction of 1,500 jobs, representing roughly 17% of its workforce.