Spotify has reported another record profit for the quarter, marking a significant turnaround after it raised the price of its Premium plans for the first time last year. The Swedish audio streaming giant posted an operating income of 266 million euros ($289 million) in the second quarter, compared to a loss of 247 million euros ($268 million) during the same period a year earlier. Additionally, the number of monthly active users surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s growth and innovation, 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 its better-than-expected earnings report, Spotify’s stock rose almost 14% in pre-market trading. In June, Spotify announced a price increase for its Premium service in the U.S., which began this month. Individual plan users will now pay $12, an increase of $1, while Duo plan users face a $2 hike to $17, and Family plan users will pay $20, up by $3. This was the first increase in membership costs in 13 years, which averaged $1 last July.
Despite the price hikes, Spotify attracted seven million net subscribers during the quarter, exceeding its previous guidance by one million. A Bloomberg analysis has indicated that Spotify remains the leading audio streaming platform globally, with its users showing a lower likelihood of canceling their subscriptions compared to other audio or video streaming services.
However, Spotify’s financial performance has not always been strong. The company’s stock plummeted by more than two-thirds in 2022 due to multiple quarters of operating losses. In early 2023, Spotify announced layoffs of 600 employees and later cut an additional 1,500 jobs, representing roughly 17% of its workforce.