Spotify has reported record profits for the second quarter, one year after the company implemented its first-ever price increase for Premium plans. The audio streaming giant recorded 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. Monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s progress, emphasizing their commitment to innovation and demonstrating that Spotify is not only a great product but also a robust business. He noted that the current timeline has exceeded the company’s own expectations and is promising for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price hikes for its Premium service in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more at $17, and Family plan costs will rise by $3 to $20. This marked the first price increase in 13 years, where membership costs were raised by an average of $1.
Despite these price adjustments, Spotify managed to gain seven million net subscribers in the last quarter, surpassing its previous guidance by one million.
Bloomberg analysis indicates that Spotify is the leading audio streaming service globally, with the lowest cancellation rates among major audio and video streaming platforms. However, the company has faced financial challenges in the past, with its stock losing over two-thirds of its value in 2022 due to consecutive quarters of operating losses. In early 2023, Spotify announced layoffs of 600 employees, followed by an additional cut of 1,500 jobs, representing about 17% of its workforce.