Spotify has reported a record profit for the second quarter, one year after it increased the prices of its Premium plans for the first time. The Swedish audio streaming company achieved an operating income of 266 million euros ($289 million), a significant improvement from the loss of 247 million euros ($268 million) it faced in the same period last year. The platform also saw a 14% annual increase in monthly active users, bringing the total to 626 million.
CEO Daniel Ek expressed excitement about the company’s growth, stating that Spotify is not only a great product but is also becoming a successful business at an unanticipated rate, indicating a positive outlook for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company announced price hikes for its Premium plans in the U.S., effective this month. Individual plan users will now pay $12, an increase of $1, while Duo plans will cost $17, up by $2, and Family plans will rise to $20, an increase of $3. This marked the first membership fee increase in 13 years.
Despite these price hikes, Spotify managed to gain seven million new subscribers during the quarter, exceeding previous expectations by one million. According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with users being the least likely to cancel their subscriptions compared to other major streaming platforms.
However, Spotify has faced challenges in the past; its stock plummeted by more than two-thirds in 2022 due to several quarters of operating losses. The company announced a workforce reduction in January 2023, laying off 600 employees, and less than a year later, it cut an additional 1,500 jobs, equivalent to about 17% of its workforce.