Spotify has reported a record profit for the second quarter, just a year after increasing the prices of its Premium plans for the first time. The Swedish audio streaming company posted 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 rose by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed his 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 announcement of better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users, which took effect this month. Individual plan users will see their fees rise by $1 to $12, while Duo plan users will pay $2 more at $17, and Family plan users will incur an additional $3, bringing their total to $20. This marked the company’s first membership price adjustment in 13 years.
Despite these increases, Spotify successfully added seven million net subscribers in the last quarter, surpassing its prior guidance by one million.
As the leading audio streaming platform globally, Spotify users are reportedly less likely to cancel their subscriptions compared to those of other audio and video streaming services, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. The company’s stock value plummeted by over two-thirds in 2022 following several quarters of operating losses. In early January 2023, Spotify announced a workforce reduction of 600 employees. Less than a year later, the company further cut 1,500 jobs, representing about 17% of its total staff.