Spotify has announced a record profit for the second quarter, following a price increase for its Premium subscription plans last year. 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) in the same period last year. The company also saw a 14% year-over-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for 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.”
In response to the strong earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium plans in the U.S. Effective this month, the cost for individual plans will rise by $1 to $12, Duo plans will increase by $2 to $17, and Family plans will see a $3 hike to $20. Last July marked the first price increase in 13 years, averaging $1.
Despite the price hikes, Spotify gained seven million net subscribers in the latest quarter, surpassing its previous forecast by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are the least likely among streaming platforms to cancel their subscriptions. However, the company experienced financial struggles in 2022, with its stock plummeting by more than two-thirds due to several quarters of operating losses. In January 2023, Spotify announced job cuts affecting 600 employees, followed by a more significant reduction of 1,500 jobs, which accounts for roughly 17% of its workforce.