Spotify has reported a record profit for the second quarter, following a price increase in its Premium plans last year. The Swedish audio streaming platform recorded an operating income of 266 million euros ($289 million), a significant improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users grew by 14% year-over-year to reach 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 positive earnings report resulted in a nearly 14% increase in Spotify’s stock during pre-market trading on Tuesday.
In June, Spotify announced that it would raise prices for Premium users in the U.S. Starting this month, individual plan users will pay an additional $1 (totaling $12), Duo plan users will see a $2 increase ($17), and Family plan users will pay $3 more ($20). This increase was the first in 13 years, which averaged $1 across all plans.
Despite the price hikes, Spotify successfully added seven million net subscribers in the quarter, exceeding its guidance by one million. The company continues to hold the title of the world’s most popular audio streaming service, with data indicating its users are the least likely to cancel their memberships compared to other streaming giants.
However, Spotify’s financial history reflects challenges. In 2022, its stock value plummeted by more than two-thirds as the company faced multiple quarters of operating losses. Earlier this year, Spotify announced layoffs affecting 600 employees and, less than a year later, cut approximately 1,500 jobs, which represented about 17% of its workforce.