Spotify has reported a record profit in the second quarter, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year. The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the quarter, a considerable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The platform also saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s growth, 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 company’s performance has exceeded expectations, which bodes well for its future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company announced plans to increase subscription prices for U.S. users, which took effect this month. Individual plan subscriptions went up by $1 to $12, Duo plans increased by $2 to $17, and Family plans rose by $3 to $20. This was the first price adjustment in 13 years, with a similar average increase implemented in July 2022.
Despite the higher prices, Spotify added seven million net subscribers during the quarter, surpassing its own forecasts by one million.
As the world’s leading audio streamer, Spotify has shown resilience, particularly as its members are less likely to cancel than those of other streaming services, according to a Bloomberg analysis. However, the company faced challenges prior to this success; it lost over two-thirds of its stock value in 2022, followed by multiple quarters of operating losses. Earlier this year, Spotify announced job cuts, initially laying off 600 employees in January and another 1,500, accounting for roughly 17% of its workforce, in another round of layoffs less than a year later.