Spotify has reported a record profit for the second quarter, a year after it elevated the prices of its Premium plans for the first time. The Swedish audio streaming platform saw an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also experienced a 14% year-on-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s trajectory, noting, “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 rose by nearly 14% in pre-market trading. In June, Spotify announced price hikes for Premium users in the United States, effective this month. Individual plan users will see an increase of $1, bringing the total to $12, while Duo plan users will pay $2 more, totaling $17. Family plan users will face a $3 increase, making it $20. Last year, the Swedish company raised membership prices for the first time in 13 years by an average of $1.
Despite the price adjustments, Spotify successfully gained seven million net subscribers during the quarter, exceeding its prior guidance by one million subscribers.
As the world’s leading audio streaming service, Spotify users have shown a lower tendency to cancel their memberships compared to other audio or video streaming services, according to a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. In 2022, Spotify saw its stock decline by over two-thirds, experiencing multiple quarters of operating losses. To address financial challenges, the company announced job cuts, first reducing its workforce by 600 employees in January 2023, and later eliminating 1,500 jobs, which accounts for approximately 17% of its staff.