Spotify has announced another record profit for the second quarter, one year after raising the prices of its Premium 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) in the same period last year. The platform also witnessed a 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 release of the earnings report, Spotify’s stock rose nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its Premium plans in the U.S., effective this month. Individual plan users will see a $1 increase to $12, while Duo plan users will pay $2 more, totaling $17. Additionally, Family plan members will pay $3 more, bringing the total to $20. This marked the first membership fee increase in 13 years, with an average hike of $1 last July.
Despite the price hikes, Spotify successfully gained seven million net subscribers during the quarter, exceeding its previous forecast by one million. A Bloomberg analysis indicated that Spotify is the leading audio streaming service globally and that its users are the least likely to cancel their subscriptions compared to other streaming platforms.
However, the company has faced significant challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds amid consecutive quarters of operating losses. Earlier this year, the company announced layoffs of 600 employees, which escalated to a total of 1,500 job cuts, constituting about 17% of its workforce.