Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year’s losses, following its first-ever price increase for Premium plans. The Swedish audio streaming company announced an operating income of 266 million euros ($289 million), a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also saw a 14% increase year-on-year, reaching 626 million.
CEO Daniel Ek remarked on the company’s promising 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. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading. In June, the company announced price increases for its U.S. Premium subscription plans that took effect this month. Individual plan subscribers will now pay $12 instead of $11, Duo plans will cost $17, up from $15, and Family plans will increase to $20 from $17. These adjustments marked the first membership cost rise in 13 years.
Despite the price hikes, Spotify experienced a net addition of seven million subscribers in the quarter, surpassing its own expectations. A Bloomberg analysis indicates that Spotify maintains the title of the most popular audio streaming service globally, with its subscribers being the least likely to cancel their memberships when compared to other streaming platforms.
However, the company’s journey has not been without challenges. In 2022, Spotify’s stock value declined by more than two-thirds amid several quarters of operating losses. Earlier this year, the company announced layoffs affecting 600 employees and later cut approximately 1,500 jobs, which represents about 17% of its workforce.