Spotify has announced a record profit for the second quarter, marking one year since 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), a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users also rose by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism 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.” He added that the company’s progress has surpassed even their own expectations, which bodes well for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its Premium services in the U.S. Starting this month, individual plan subscribers will pay an additional $1 (now $12), Duo plan users will see a $2 increase (now $17), and Family plan users will pay $3 more (now $20). This follows a previous price hike in July 2022, the first in 13 years, which increased fees by an average of $1.
Despite the price hikes, the company successfully added seven million net subscribers during the quarter, exceeding its prior forecast by one million.
Spotify remains the leading audio streaming platform globally and boasts the lowest cancellation rates among major audio and video streaming services, according to a Bloomberg analysis. However, it has faced financial struggles in the past; its stock lost more than two-thirds of its value in 2022 amid multiple quarters of operating losses. The company’s restructuring efforts included cutting 600 jobs in January 2023, followed by an additional 1,500 layoffs—about 17% of its workforce—less than a year later.