Spotify has reported record profits in the second quarter, following its first-ever price increase for Premium plans last year. The Swedish audio streaming service achieved 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. Additionally, the platform saw a 14% year-over-year increase in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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.” He noted that their success has surpassed even their own expectations.
Following the announcement of these strong earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium subscriptions in the U.S. Starting this month, individual subscribers will pay $12 per month, an increase of $1, while Duo plans will now cost $17, up by $2. Family plans will see a $3 increase, bringing the total to $20. This marked the first price adjustment in 13 years, after a similar increase was implemented last July.
Despite the higher prices, Spotify gained seven million net subscribers during the quarter, surpassing its previous expectations by one million.
As the leading audio streaming platform globally, Spotify has demonstrated resilience, as a Bloomberg analysis found that its users are among the least likely to cancel subscriptions compared to other audio and video streaming services. However, the company has faced financial challenges in recent years, with its stock plummeting over two-thirds in value during 2022 due to multiple quarters of losses. In early 2023, Spotify announced layoffs affecting 600 employees, followed by a larger cut of 1,500 jobs, roughly 17% of its workforce.