Spotify has announced a record profit for the second quarter, a year after it first raised the price of its Premium subscription plans. 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) during the same quarter last year. The number of monthly active users saw a 14% increase year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for 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.” He added that the company’s development has surpassed even their expectations, indicating a promising future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S. Effective this month, individual plan subscribers will see an increase of $1 to $12, Duo plan subscribers will pay $2 more for a total of $17, and Family plan users will experience a $3 increase, bringing their total to $20. This marked the first increase in membership costs in 13 years, with an average rise of $1 last July.
Despite the price adjustments, Spotify gained seven million net subscribers during the quarter, exceeding its previous estimates by one million.
As the leading audio streaming platform globally, Spotify’s users are among the least likely to cancel their subscriptions compared to other audio or video streaming services, according to a Bloomberg analysis.
However, the company faced significant challenges in the past, with its stock value plummeting by more than two-thirds in 2022 amid multiple quarters of operational losses. In January 2023, Spotify announced layoffs affecting 600 employees, and by early 2024, the company had reduced its workforce by 1,500 positions, which amounted to approximately 17% of its total staff.