Spotify has reported a new record profit for the second quarter, marking a significant turnaround since it raised its Premium plan prices for the first time last year. The Swedish audio streaming giant posted an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same period in the previous year. Monthly active users also saw growth of 14% year-over-year, 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. 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 announcement, Spotify shares rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify confirmed price increases for its Premium service in the U.S. Starting this month, individual plans will cost $1 more, bringing the total to $12, while Duo plans will increase by $2 to $17, and Family plans will see a $3 rise to $20. This change came after the company raised membership prices for the first time in 13 years last July, an increase of about $1 on average.
Despite the higher prices, Spotify successfully added seven million net subscribers in the quarter, exceeding its previous forecast by one million.
As the leading audio streaming service globally, Spotify boasts the highest retention rates among audio and video streaming platforms, according to a Bloomberg analysis. However, the company faced challenges in recent years, experiencing a loss of over two-thirds of its stock value in 2022 due to several quarters of operating losses. In January 2023, Spotify announced it would lay off 600 employees, followed by another round of job cuts involving 1,500 positions, approximately 17% of its workforce, less than a year later.