Spotify has reported a record profit for the latest quarter, a year after raising the prices of its Premium subscription plans for the first time in its history. The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. The platform also saw its monthly active users increase 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. This all bodes very well for the future.”
Following the announcement of its strong earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
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In June, the company revealed it would be increasing prices for its Premium subscribers in the U.S. Starting in October, individual plan users will pay $12, an increase of $1, while Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This marks Spotify’s first membership price increase in 13 years, implemented last July.
Despite the price hikes, Spotify added seven million net subscribers in the recent quarter, exceeding prior expectations by one million. A Bloomberg analysis indicates that Spotify remains the leading audio streaming service worldwide, with its users showing the lowest likelihood of canceling their subscriptions compared to other major audio and video streaming platforms.
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However, Spotify’s financial journey hasn’t always been smooth. The company’s stock experienced a decline of over two-thirds in 2022, attributed to several quarters of operating losses. Earlier this year, Spotify announced layoffs of 600 employees and subsequently cut 1,500 jobs, amounting to approximately 17% of its workforce.
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