Spotify has announced a record quarter of profits, following a price increase for its Premium plans for the first time last year. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement about Spotify’s growth, 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 surged nearly 14% in pre-market trading on Tuesday. In June, the company announced a price increase for its Premium subscriptions in the U.S., with individual plans going up by $1 to $12, duo plans increasing by $2 to $17, and family plans rising by $3 to $20. This price adjustment came a year after the company raised membership costs by an average of $1 for the first time in 13 years.
Despite the price hikes, Spotify saw an addition of seven million net subscribers in the quarter, exceeding its previous expectations by one million. According to a Bloomberg analysis, Spotify remains the most favored audio streaming service globally, with users showing the least likelihood of canceling their memberships.
However, Spotify’s financial journey has had its challenges. The company’s stock dropped by more than two-thirds in 2022, accompanied by several quarters of operational losses. In early 2023, Spotify announced a plan to lay off 600 employees, followed by a more drastic cut of 1,500 jobs, representing about 17% of its workforce, less than a year later.