Spotify has announced record profits for the second quarter, marking a significant turnaround since raising the prices of its Premium plans for the first time ever a year ago. The Swedish audio streaming company posted an operating income of 266 million euros ($289 million) in this quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism, 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. In June, the company announced a price hike for its Premium services in the U.S., effective this month. Individual plan subscribers will now pay $1 more per month, bringing their total to $12. Duo plans will cost $17 (up by $2), while Family plans will increase by $3 to $20. This followed a previous price increase in July 2022, when Spotify raised costs for the first time in 13 years by an average of $1.
Despite the price increases, Spotify managed to add seven million new subscribers this quarter, exceeding its previous guidance by one million. According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with users among the least likely to cancel their subscriptions compared to other streaming platforms.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock plummeted by more than two-thirds as it faced multiple quarters of operational losses. Earlier this year, Spotify announced layoffs, including cutting 600 employees in January and an additional 1,500 jobs, accounting for about 17% of its workforce, less than a year later.