Spotify has announced a record profit for the second quarter, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same period last year. The company also saw its monthly active users increase by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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.” He noted that the company’s progress has surpassed even its own expectations, suggesting a positive outlook for the future.
Following the announcement of its strong earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify had revealed plans to raise prices for its Premium users in the U.S. Starting this month, users on individual plans will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. Last July, the company raised membership costs by an average of $1 for the first time in 13 years.
Despite these price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify’s users are also the least likely to cancel their memberships compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company has faced challenges in the past. In 2022, Spotify’s stock lost more than two-thirds of its value due to multiple quarters of operating losses. Earlier this year, the company announced plans to reduce its workforce, initially laying off 600 employees in January and then cutting an additional 1,500 jobs, which accounted for about 17% of its total staff.