Spotify has announced a remarkable second quarter, achieving record profits just a year after increasing the prices of its Premium subscriptions for the first time. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) in the same quarter last year. Monthly active users climbed by 14% 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.”
Following the encouraging earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium plans in the U.S. beginning this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will face a $3 hike to $20. This price adjustment came after the company raised membership costs for the first time in 13 years last July.
Despite the price hikes, Spotify successfully added seven million net subscribers in the quarter, exceeding its earlier forecast by one million.
Spotify currently holds the title of the world’s leading audio streaming service, with users being less prone to cancel their memberships compared to other streaming platforms, according to a Bloomberg analysis.
However, the company’s financial trajectory has been rocky in the past. Spotify’s stock experienced a decline of more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, Spotify announced it would lay off 600 employees, followed by a further reduction of 1,500 jobs, accounting for approximately 17% of its workforce less than a year later.