Spotify has announced a record profit for the second quarter, a year after it increased the prices of its Premium subscription plans for the first time. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also grew 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.” The company’s stock rose nearly 14% in pre-market trading following the encouraging earnings report.
Earlier this month, Spotify implemented price increases for its Premium subscriptions in the U.S. Individual plan users will now pay $12, an increase of $1; Duo plan users will pay $17, an increase of $2; and Family plan users will pay $20, an increase of $3. This marked the first hike in membership costs in 13 years, averaging $1.
Despite these price adjustments, Spotify managed to gain seven million net subscribers in the quarter, exceeding its own predictions by one million.
As the leading audio streaming platform globally, Spotify’s users are reportedly the least likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. The stock fell sharply in 2022, losing over two-thirds of its value amid several quarters of operating losses. In January 2023, the company announced the layoff of 600 employees, followed by a further reduction of 1,500 jobs, accounting for about 17% of its workforce, less than a year later.