Spotify has announced a remarkable quarter of profits, achieving record figures following its first price increase for Premium plans in over a decade. In the second quarter, the Swedish audio streaming giant reported an operating income of 266 million euros (approximately $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% year-over-year growth in its monthly active users, reaching 626 million.
In a statement, CEO Daniel Ek expressed enthusiasm about the company’s current trajectory, highlighting their ongoing innovations and positioning as not just a premier product but also a strong business. He noted that their success is surpassing expectations, which paints a positive outlook for Spotify’s future.
Encouraged by these results, Spotify’s stock surged nearly 14% in pre-market trading. Earlier this month, the company indicated plans to raise prices for U.S. Premium users for the first time in 13 years—an increase of $1 for individual plans (to $12), $2 for Duo plans (to $17), and $3 for Family plans (to $20). Despite these hikes, Spotify managed to attract an additional seven million net subscribers in the quarter, exceeding its previous guidance.
Spotify continues to lead the global audio streaming market, with a Bloomberg analysis indicating that its users are the least likely to cancel their subscriptions compared to other streaming services. However, the past year has not been without challenges. In 2022, Spotify’s stock saw a dramatic decline, losing over two-thirds of its value amid numerous quarters of operating losses. This was compounded by significant workforce reductions earlier this year, including two rounds of layoffs totaling approximately 2,100 employees.
Looking ahead, Spotify’s latest performance illustrates resilience and adaptability in a competitive industry, suggesting that the company is well-positioned for further growth and innovation in the evolving landscape of audio streaming.