Spotify announced a record profit for the second quarter, marking a year since it first increased the prices of its Premium plans. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), a significant recovery from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users also saw a 14% year-over-year increase, 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
The company’s share price surged by nearly 14% in pre-market trading after the positive earnings report.
In June, Spotify announced a price hike for its Premium subscriptions in the U.S., which took effect this month. Individual plans now cost $12, up by $1, Duo plans increased by $2 to $17, and Family plans went up by $3 to $20. This was the first membership cost increase in 13 years, following an average hike of $1 last July.
Despite the price adjustments, Spotify gained seven million net subscribers in the last quarter, beating its own expectations by one million.
A Bloomberg analysis indicated that Spotify holds the title as the most popular audio streaming service globally, with users being less likely to cancel their memberships compared to other streaming platforms. However, the company had faced financial challenges, with its stock plummeting over two-thirds in value during 2022, prompting significant job cuts, including a reduction of 600 employees in January 2023 and an additional 1,500 jobs later that year, representing about 17% of its workforce.