Spotify has announced record profits for the second quarter, a year after it increased the prices of its Premium subscription plans for the first time. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), recovering from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users also experienced a 14% year-over-year growth, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s trajectory, 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.
In June, Spotify announced price increases for its U.S. Premium users. Individual plan subscribers will now pay $12 per month, up by $1, while Duo plan subscribers will see a $2 increase to $17, and Family plan subscribers will pay $20, a $3 increase. This marked the first price hike in 13 years, following an average increase of $1 last July.
Despite these increases, Spotify added seven million net subscribers in the quarter, exceeding its earlier forecast by one million.
As the leading audio streaming service globally, Spotify users are reported to be the least likely among streaming platforms to cancel their subscriptions, according to a Bloomberg analysis. However, the company faced significant financial challenges in 2022, losing over two-thirds of its stock value and experiencing multiple quarters of operating losses. In early 2023, Spotify announced cuts of 600 jobs and later reduced its workforce by an additional 1,500, approximately 17% of its total staff.