Spotify has announced record profits for the second quarter, a year after increasing the prices of its Premium subscription plans for the first time. The Swedish audio streaming platform shared an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) in the same quarter last year. The company also saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the release of this positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its U.S. Premium users, effective this month. Individuals will see an increase of $1 to $12, Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This was the first price adjustment in 13 years, with an average increase of $1 last July.
Despite the price hikes, Spotify added seven million net subscribers in the quarter, exceeding its own projections by one million.
Spotify remains the leading audio streaming service globally, with users less likely to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the road to financial stability has not been easy for Spotify. The company’s stock lost more than two-thirds of its value in 2022, amid several quarters of operating losses. In January 2023, Spotify announced layoffs of 600 employees, and by the end of the year, it had cut 1,500 jobs, which constituted approximately 17% of its workforce.