Spotify has announced a record profit for the second quarter, marking a significant turnaround from losses a year ago, following its first-ever price increase for Premium subscriptions.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the quarter, contrasting with a loss of 247 million euros ($268 million) in the same period last year. Additionally, the platform saw a 14% year-over-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed plans to raise prices for its Premium services in the U.S. Starting this month, individual plan users will see an increase of $1 to $12, Duo plan subscribers will pay $2 more at $17, and Family plan users will face a $3 increase to $20. This price adjustment comes after the company raised membership costs by an average of $1 for the first time in 13 years last July.
Despite the price hikes, Spotify successfully added seven million net subscribers during the quarter, exceeding its previous estimates by one million.
As the leading audio streaming platform globally, Spotify’s users are reportedly the least likely to cancel their subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the financial landscape for Spotify hasn’t always been positive. The company’s stock value plummeted by more than two-thirds in 2022 amid multiple quarters of operating losses. In January 2023, Spotify announced the reduction of 600 positions and later cut 1,500 jobs, which accounts for about 17% of its workforce, less than a year later.