Spotify has reported another record profit for the second quarter, following its first-ever price increase for Premium plans last year. The Swedish audio streaming service recorded 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. The number of monthly active users also saw a 14% annual increase, 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. 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, Spotify announced a price increase for its Premium services in the U.S. Effective this month, individual plans will cost $12, an increase of $1; Duo plans will now be $17, up by $2; and Family plans will rise by $3 to $20. The previous July marked Spotify’s first membership hike in 13 years, averaging an increase of $1.
Despite the price rises, Spotify managed to add seven million net subscribers in the latest quarter, surpassing its own expectations by one million.
As the leading audio streaming platform globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock plummeted by more than two-thirds due to a series of operating losses. Earlier this year, the company announced layoffs, initially reducing its workforce by 600 employees and later cutting an additional 1,500 jobs, amounting to approximately 17% of its staff.