Spotify has reported a record profit for the second quarter, marking a notable recovery after it raised the prices of its Premium plans for the first time in history last year.
The Swedish audio streaming service achieved an operating income of 266 million euros (approximately $289 million), a significant improvement compared to a loss of 247 million euros ($268 million) in the same quarter the previous year. The number of monthly active users also 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.” He noted that the growth has exceeded internal expectations, suggesting a positive outlook for the future.
Following the release of its earnings report, Spotify’s stock price surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium plans in the U.S., which took effect this month. Individual subscribers will now pay $12 a month, an increase of $1. Duo plan subscribers will pay $17, up by $2, while Family plan users will be charged $20, reflecting a $3 increase. This pricing adjustment followed an overall price hike last July, the first of its kind in 13 years.
Despite the higher fees, Spotify successfully gained seven million net subscribers during the quarter, surpassing its previous estimates by one million.
As the leading audio streaming platform globally, Spotify users show a lower tendency to cancel their subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the company has faced challenges in the past. Spotify’s stock suffered a decline of more than 66% in 2022 due to several quarters of operating losses. In early 2023, the company announced the layoff of 600 employees, followed by a significant cut of 1,500 jobs, accounting for roughly 17% of its workforce less than a year later.