Spotify has announced a record quarter of profits, marking a significant turnaround since it raised the prices for its Premium plans for the first time last year. The Swedish audio streaming giant revealed an operating income of 266 million euros ($289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) in the same period the previous year. The company also reported a 14% increase in monthly active users, reaching a total of 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 report, Spotify’s stock saw a nearly 14% increase in pre-market trading.
In June, Spotify announced a raise in prices for its Premium users in the U.S. Starting this month, individuals will see their fees go up by $1 to $12, Duo users will pay $2 more bringing their total to $17, and Family plan costs will increase by $3 to $20. This price hike was the first increase in membership costs in 13 years.
Despite the price increases, Spotify managed to gain seven million net subscribers in the quarter, exceeding its own guidance by one million. A Bloomberg analysis highlighted that Spotify is the leading audio streaming service globally, with users less likely than those of other streaming platforms to cancel their subscriptions.
However, the company’s financial history has been turbulent. In 2022, Spotify’s stock value plummeted by over two-thirds due to several quarters of operating losses. In January 2023, Spotify announced layoffs of 600 employees, followed by another round of job cuts affecting 1,500 positions, which represented roughly 17% of its workforce.