Spotify has announced a record profit for the second quarter, marking a significant turnaround since the company raised its Premium plan prices for the first time last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the quarter, a substantial rise from a loss of 247 million euros ($268 million) in the same period last year. Its monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism in a statement, highlighting that Spotify continues to innovate and solidify its position as a successful business. He noted that the company’s progress has surpassed even its own expectations, suggesting a positive outlook for the future.
Following the favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium subscription plans in the U.S., which took effect this month. Users on individual plans will now pay $12, an increase of $1. Duo plans will be priced at $17, up by $2, and family plans will see a $3 increase to $20. This marked the first increase in membership costs in 13 years.
Despite the price adjustments, Spotify managed to gain seven million net subscribers during the quarter, exceeding its prior expectations by one million.
According to a Bloomberg analysis, Spotify remains the world’s leading audio streaming platform, with users being less likely to cancel their subscriptions compared to other audio and video streaming services. However, the company faced a challenging financial landscape in 2022, losing more than two-thirds of its stock value amid several quarters of operational losses. Earlier this year, Spotify announced a workforce reduction of 600 employees, followed by a further cut of 1,500 jobs, accounting for approximately 17% of its staff.