Spotify has announced a record profit for the second quarter, just a year after increasing the price of its Premium subscription plans for the first time in its history. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) in the same quarter last year. The platform also saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s performance, emphasizing its commitment to innovation and the ability to exceed expectations. Following the announcement of this positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium services in the U.S., effective this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan subscribers will face a $3 rise to $20. This marked the first membership cost increase in 13 years, averaging an additional dollar last July.
Remarkably, despite these price adjustments, Spotify gained seven million net subscribers during the quarter, surpassing its previous targets by a million. According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with its users showing comparatively high retention rates.
The road to this success, however, has not been without challenges. Spotify’s stock plummeted by over 66% in 2022 amid multiple quarters of operating losses. Earlier this year, the company announced a workforce reduction of 600 employees, and less than a year later, it laid off 1,500 staff members, roughly 17% of its workforce.