Spotify has announced another record profit for the second quarter, marking a significant turnaround since it raised prices on its Premium plans for the first time last year. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million), compared to a loss of 247 million euros ($268 million) during the same period a year ago. The number of monthly active users rose by 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, which bodes very well for the future.”
Following the announcement, Spotify’s stock surged nearly 14% in pre-market trading due to the better-than-expected earnings report.
In June, Spotify revealed it would increase Premium subscription prices for U.S. users starting this month. Individual plans will now cost $12, up from $11; Duo plans will be $17, an increase of $2; and Family plans will now be $20, rising by $3. This price adjustment follows an average membership price increase of $1 last July, the first hike in 13 years.
Despite these price increases, Spotify successfully added seven million net subscribers during the quarter, which exceeded its own guidance by one million.
Although Spotify is currently the leading audio streaming service globally, its financial performance has not always been stable. The company’s stock dropped more than two-thirds of its value in 2022 due to a series of operating losses. In response, Spotify announced workforce reductions, cutting 600 jobs in January 2023 and an additional 1,500 roles, representing about 17% of its workforce, less than a year later.