Spotify has reported a record profit for the second quarter, following a price increase for its Premium plans last year. The Swedish audio streaming company announced an operating income of 266 million euros ($289 million), a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also saw a 14% increase year-on-year, reaching 626 million.
CEO Daniel Ek expressed excitement 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.” He noted that the company’s achievements have surpassed their expectations, hinting at a promising future ahead.
Following the announcement of better-than-expected earnings, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Individual plan members will see an increase of $1 to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will be charged $3 extra, bringing the total to $20. This price adjustment marked the first increase in membership costs in 13 years, averaging an additional $1.
Despite the higher prices, Spotify managed to gain seven million net new subscribers in the quarter, exceeding its previous expectations by one million.
Spotify remains the leading audio streaming service globally, with users showing a strong tendency to maintain their subscriptions, according to a Bloomberg analysis. However, the company’s financial history has seen challenges; in 2022, Spotify’s stock value dropped by more than two-thirds due to several quarters of losses. In early 2023, Spotify announced layoffs of 600 employees, and by early 2024, it had cut 1,500 jobs, approximately 17% of its workforce.