Spotify has announced record profits for the second quarter, a year after it implemented its first-ever price increase for Premium subscriptions. The Swedish audio streaming platform reported an operating income of 266 million euros (about $289 million), a remarkable turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also noted a 14% annual increase in monthly active users, bringing the total to 626 million.
In a statement, CEO Daniel Ek expressed enthusiasm about Spotify’s innovative approach and business performance, stating that it has exceeded even their expectations and looks promising for the future. Following the positive earnings announcement, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed that it would be raising prices for its Premium services in the U.S. Users on individual plans will now pay an additional $1, bringing the cost to $12. Duo plans will see a $2 increase to $17, while Family plans will rise by $3 to $20. This marked the first price hike in 13 years, with an average increase of $1 last July. Despite the higher costs, Spotify gained seven million new subscribers in the quarter, surpassing its forecast by one million.
Spotify remains the leading audio streaming service globally, and a Bloomberg analysis indicates that its subscribers are less likely to cancel their memberships compared to users of other audio or video platforms. However, the company faced financial challenges in the past, with its stock plummeting by more than two-thirds in 2022 due to ongoing operating losses. Earlier this year, Spotify announced plans to lay off 600 employees, followed by a larger reduction of 1,500 jobs, which amounted to about 17% of its workforce.