Spotify has announced another record profit for the second quarter, marking a year since it first raised the prices of its Premium subscription plans. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), a significant turnaround from 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 enthusiasm about the company’s 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium services in the U.S., effective this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more, totaling $17, and Family plan subscribers will face a $3 increase, bringing the cost to $20. This was the first increase in membership costs in 13 years.
Despite these increases, Spotify gained seven million net subscribers in the quarter, surpassing their previous expectations by one million. Furthermore, a Bloomberg analysis revealed that Spotify users are the least likely to cancel their subscriptions compared to other audio and video streaming platforms.
However, it hasn’t always been smooth sailing for Spotify. In 2022, the company’s stock plummeted by more than two-thirds as it incurred several quarters of operating losses. In early 2023, Spotify announced layoffs affecting 600 employees, followed by further reductions of 1,500 jobs, which accounted for approximately 17% of its workforce.