Spotify has reported a record profit for the second quarter, marking a significant turnaround since it raised the prices of its Premium plans for the first time a year ago. The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) for the quarter, a notable improvement compared to a loss of 247 million euros ($268 million) a year earlier. Additionally, the number of monthly active users increased by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s current 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 added that the timeline for this growth has surpassed their expectations, indicating positive prospects for the future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company announced price hikes for its Premium users in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more to reach $17, and Family plan users will be charged $3 more, bringing the total to $20. This marked the first hike in membership costs in 13 years, averaging a rise of $1.
Despite these price increases, Spotify successfully added seven million net subscribers in the quarter, exceeding its previous guidance by one million. A Bloomberg analysis revealed that Spotify is the leading audio streaming service globally, with its users being the least likely among streaming giants to cancel their memberships.
However, the company has faced challenges in the past, notably losing over two-thirds of its stock value in 2022 due to consecutive quarters of operating losses. In early 2023, Spotify announced a workforce reduction of 600 employees, followed by a further cut of 1,500 jobs, accounting for around 17% of its total staff.