Spotify has reported a record profit for the second quarter, marking a significant turnaround from the previous year’s losses, just a year after increasing the price of its Premium subscription plans for the first time. The Swedish audio streaming service posted an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same quarter last year. The number of monthly active users also surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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 this positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday. In June, Spotify announced an increase in prices for Premium users in the U.S., effective this month. Individual plan subscribers will see their monthly fee increase by $1 to $12, while Duo plan users will pay $2 more, bringing their total to $17, and Family plan users will pay $3 more, totaling $20. This was the first price hike in 13 years, averaging $1.
Despite these price increases, Spotify gained seven million net subscribers during the quarter, exceeding its prior projection by one million. A Bloomberg analysis noted that Spotify remains the leading audio streaming service globally, with its users being the least likely to cancel their subscriptions compared to other audio and video streaming platforms.
However, the company’s financial history has not always been favorable. In 2022, Spotify’s stock lost over two-thirds of its value amid multiple quarters of operating losses. In January 2023, Spotify announced plans to lay off 600 employees and less than a year later, the company reduced its workforce by 1,500 staff members, accounting for roughly 17% of its total employees.