Spotify announced a record profit for the second quarter, marking significant growth just one year after it increased the price of its Premium plans for the first time. The Swedish audio streaming service reported 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 saw a 14% increase year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company had announced a price increase for its Premium users in the U.S., which took effect this month. Individual plan users are now paying $12, an increase of $1, while Duo plan subscribers will pay $17, up by $2, and Family plan users will pay $20, an increase of $3. This marked the first price hike in 13 years, averaging $1 across plans.
Despite the price increases, Spotify added seven million net subscribers during the quarter, surpassing its previous guidance by one million. A Bloomberg analysis revealed that Spotify remains the most popular audio streaming platform worldwide, with users less likely to cancel their subscriptions compared to competitors in the audio and video streaming space.
However, the company faced challenges in the past; Spotify’s stock lost more than two-thirds of its value in 2022 amid ongoing operating losses. In January 2023, the company cut 600 employees and less than a year later announced the layoff of 1,500 staff members, equating to approximately 17% of its workforce.