Spotify announced record profits for the second quarter, following last year’s first-ever price increase for its Premium plans. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a significant improvement from a loss of 247 million euros ($268 million) during the same quarter last year. Monthly active users rose by 14% to reach 626 million.
CEO Daniel Ek expressed optimism about Spotify’s innovation and business performance, 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium services in the U.S. starting this month. Individual plan users will see an increase of $1, bringing the total to $12, while Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This price adjustment came after the company had previously raised membership costs for the first time in 13 years, averaging an extra dollar in July.
Despite these increases, Spotify welcomed seven million new net subscribers in the quarter, exceeding its own forecasts by one million.
As the leading audio streaming platform globally, a Bloomberg analysis noted that Spotify users are less likely than those of any other streaming service to cancel their subscriptions. However, the company’s financial trajectory has not always been stable. In 2022, Spotify’s stock value fell by over two-thirds due to multiple quarters of operating losses. In early 2023, the company laid off 600 employees, and less than a year later, it announced the termination of 1,500 jobs, or approximately 17% of its workforce.