Spotify has reported a record profit for the second quarter, following the first price increase of its Premium plans last year. The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million), a significant recovery from a loss of 247 million euros ($268 million) in the same quarter the previous year. Monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism, 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.”
Spotify’s stock surged nearly 14% in pre-market trading following the positive earnings report. Earlier in June, the company announced price increases for its Premium services in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will pay $3 more, bringing the total to $20. This was the first price hike in 13 years.
Despite these increases, Spotify added seven million net subscribers in the quarter, exceeding its prior expectations by one million. A Bloomberg analysis highlighted that Spotify remains the leading audio streaming service globally, with its users being the least likely to cancel their memberships compared to other audio or video streaming platforms.
However, Spotify’s journey has not been without challenges. The company’s stock value plummeted by more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, Spotify initiated layoffs of 600 employees, followed by another reduction of 1,500 jobs, representing approximately 17% of its workforce, less than a year later.