Spotify has reported a record profit for the second quarter, marking a significant turnaround from a loss seen a year prior, following its first-ever price increase for Premium plans. The Swedish audio streaming service posted an operating income of 266 million euros ($289 million), contrasting sharply with a loss of 247 million euros ($268 million) in the same quarter last year. Monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s future, stating, “It’s an exciting time at Spotify. We keep on innovating and showing that we aren’t just a great product but also a great business.” The company’s stock rose nearly 14% in pre-market trading on Tuesday after the favorable earnings report.
In June, Spotify announced a price hike for its Premium services in the U.S. Effective this month, individual plan subscribers will see an increase of $1 to $12, Duo plan users will pay $2 more for a total of $17, and Family plan members will face a $3 increase, bringing their total to $20. This marked the first adjustment in 13 years, as the company raised membership costs by an average of $1 last July.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, exceeding its projections by one million. A Bloomberg analysis highlighted Spotify as the leading audio streamer globally, noting that its users are the least likely among streaming platforms to cancel their subscriptions.
However, Spotify’s financial journey has not always been smooth. The company’s stock value plummeted by over two-thirds in 2022 due to several quarters of operational losses. In early 2023, Spotify implemented a workforce reduction of 600 employees, followed by further cuts affecting 1,500 jobs, which represented approximately 17% of its staff.