Spotify has announced a record profit for the second quarter, marking its success a year after it increased the prices of its Premium subscription plans for the first time. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) the previous year. The number of monthly active users also saw a 14% annual increase, 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 announced an increase in prices for Premium users in the U.S., effective this month. Individual plan subscribers will pay an additional dollar ($12), Duo plan users will see an increase of two dollars ($17), and Family plan subscribers will pay three dollars more ($20). This price adjustment followed a similar increase in July 2022, which was the first in 13 years.
Despite these hikes, Spotify gained seven million net subscribers during the quarter, exceeding its prior expectations by one million. The platform remains the leading audio streaming service globally and has been noted for having users who are less likely to cancel their subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds as it experienced multiple quarters of operating losses. The firm announced job cuts in January 2023, reducing its workforce by 600 employees, followed by a more significant reduction of 1,500 jobs, or roughly 17% of its total staff, less than a year later.