Spotify has announced a record profit in its latest financial report, following a price increase for its Premium plans last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) a year earlier. Monthly active users also grew 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 added that the company’s timeline for growth has surpassed their expectations, signaling a positive outlook for the future.
Following the earnings announcement, Spotify’s stock surged nearly 14% during pre-market trading on Tuesday.
In June, Spotify announced price increases for its U.S. Premium users, with individual plans rising by $1 to $12, Duo plans increasing by $2 to $17, and Family plans going up by $3 to $20. This marks the first membership cost increase in 13 years, with an average rise of $1 implemented last July.
Despite these price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its previous guidance by one million. A Bloomberg analysis indicated that Spotify remains the most popular audio streaming service worldwide, with users being the least likely to cancel their memberships compared to other streaming platforms.
However, Spotify’s financial journey has been challenging. The company’s stock plummeted by more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, Spotify announced layoffs of 600 employees, followed by another reduction of 1,500 jobs, which accounted for approximately 17% of its workforce.