Spotify has announced a record profit for the second quarter, marking a notable turnaround from a loss just a year prior, following its first price increase for Premium plans. The Swedish audio streaming company reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users have surged by 14% year over year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s performance, 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. This all bodes very well for the future.” Following the announcement, Spotify’s stock saw a nearly 14% rise in pre-market trading.
In June, Spotify revealed a price increase for its U.S. Premium subscribers, effective this month. Individual plans now cost $12, a $1 increase, Duo plans are priced at $17, up by $2, and Family plans are now $20, an increase of $3. This marked the first membership cost increase in 13 years.
Despite the higher prices, Spotify added seven million net subscribers in the quarter, surpassing its previous guidance by one million. A Bloomberg analysis highlighted that Spotify remains the leading audio streaming platform globally, with users less likely to cancel their subscriptions compared to other streaming services.
However, Spotify has faced challenges in the past; in 2022, its stock value plummeted by over two-thirds due to multiple quarters of operating losses. The company has also made significant staff cuts, including a reduction of 600 employees in January 2023 and an additional 1,500 jobs, amounting to about 17% of its workforce, less than a year later.