Spotify has announced a record profit for the second quarter, marking a significant turnaround since its first-ever price increase of Premium plans a year ago. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also rose by 14%, reaching 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. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for U.S. Premium users, effective this month. Individual plan users will see an increase of $1 (now $12), Duo plan users will pay $2 more ($17), and Family plan users will face a $3 increase ($20). This decision followed a previous average membership cost increase of $1 after 13 years without any changes.
Despite these price hikes, Spotify managed to gain seven million new subscribers in the quarter, exceeding its initial guidance by one million.
As the world’s leading audio streaming platform, Spotify also boasts users who are the least likely to cancel their memberships compared to other streaming services, according to a Bloomberg analysis. However, it has faced financial challenges in the past, with the stock losing over two-thirds of its value in 2022 due to consecutive quarters of operating losses. In early 2023, the company announced layoffs of 600 employees, followed by another reduction of 1,500 jobs, accounting for approximately 17% of its workforce.