Spotify announced a record profit for the second quarter, marking a significant turnaround from a loss a year ago, following its first-ever price increase for Premium plans. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) in the same period last year. Monthly active users surged by 14% year-over-year, reaching 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.” He highlighted that the company’s growth timeline has exceeded expectations, indicating a promising outlook for the future.
Following the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for Premium subscriptions in the United States, effective this month. Individual plan users will now pay $12, up by $1, while Duo plan users will pay $17, an increase of $2, and Family plan users will pay $20, an increase of $3. This marked the first price hike in 13 years, bringing membership costs to an average of $1 more than before.
Despite the price hikes, Spotify gained seven million net subscribers this quarter, exceeding its previous guidance by one million. The company remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are the least likely to cancel their memberships compared to other audio or video streaming platforms.
However, Spotify has faced challenges in the past; its stock plummeted by more than two-thirds in 2022 due to several quarters of operating losses. Earlier this year, the company announced layoffs of 600 employees, followed by another round of cuts amounting to 1,500 jobs, approximately 17% of its workforce.