Spotify has reported a record profit for the second quarter, reflecting a successful year since it raised the price of its Premium subscription plans for the first time. The Swedish audio streaming platform announced 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. Monthly active users have increased 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 earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, the company announced a price increase for Premium users in the U.S., effective this month. Monthly fees for individual plans will rise by $1 to $12, Duo plans will increase by $2 to $17, and Family plans will see a $3 increase to $20. This marked the first price rise in 13 years, with an average increase of $1 last July.
Despite the higher prices, Spotify successfully added seven million net subscribers in the quarter, surpassing its prior estimates by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are the least likely to cancel their subscriptions compared to other audio and video streaming platforms. However, the company has faced financial struggles in the past, as its stock plummeted by over two-thirds in 2022 due to several quarters of operating losses. Earlier this year, Spotify announced job cuts of 600 employees and later laid off 1,500 staff members, which accounted for about 17% of its workforce.