Spotify has announced record profits for the second quarter, one year after it implemented the first-ever price increase for its Premium plans. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million), a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. The company also saw its monthly active users rise by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism 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, which bodes very well 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 a price hike for its U.S. Premium users, effective this month. Individual plan subscribers will now pay $12, up $1 from before, Duo plan subscribers will face an increase of $2 to $17, and Family plan subscribers will see a $3 increase to $20. This marked the first price increase in 13 years, with the average membership cost rising by about $1.
Despite the higher prices, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million. According to a Bloomberg analysis, Spotify remains the leading audio streaming platform globally, with its users showing the lowest likelihood of canceling their memberships compared to other audio or video streaming services.
However, the company’s financial trajectory has had its ups and downs. Spotify’s stock lost over two-thirds of its value in 2022, attributed to several quarters of operating losses. In January 2023, the company announced layoffs affecting 600 employees, and less than a year later, it reduced its workforce by an additional 1,500 jobs, representing approximately 17% of its staff.