Spotify has reported a record profit for the second quarter of the year, a year after it increased the prices of its Premium plans for the first time. The company achieved an operating income of 266 million euros (approximately $289 million), a significant turnaround from a loss of 247 million euros (around $268 million) a year earlier. Monthly active users rose by 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed optimism, 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.” In response to the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its Premium subscription in the U.S., effective this month. Individual plan users will see a $1 increase to $12, duo plans will increase by $2 to $17, and family plans will go up by $3 to $20. This follows the company’s first membership cost hike in 13 years, which averaged $1 last July.
Despite the price hikes, Spotify successfully added seven million net new subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming platform globally, Spotify users are also reportedly the least likely to cancel their subscriptions according to a Bloomberg analysis. However, the company had faced challenges, including a more than two-thirds decline in its stock value in 2022 amid multiple quarters of losses. In early 2023, Spotify announced layoffs of 600 employees, followed by an additional 1,500 job cuts, amounting to about 17% of its workforce.