Spotify has reported record profits for the second quarter, marking a significant turnaround from a year ago when the company first raised the prices of its Premium subscription plans. The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million), a stark contrast to a loss of 247 million euros ($268 million) in the same period last year. Additionally, the number of monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism 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.” He noted that their achievements have surpassed even the company’s expectations, which bodes well for its future.
Following this 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 offerings in the U.S., effective this month. Individual plan users will now pay $12, an increase of $1; Duo plan users will pay $17, up by $2; and Family plan users will now pay $20, which is $3 more. This price adjustment came after the company had previously raised membership costs for the first time in 13 years by an average of $1 in July 2022.
Despite the raised prices, Spotify managed to attract seven million new subscribers in the quarter, exceeding its prior guidance by one million. A Bloomberg analysis indicated that Spotify is the leading audio streaming service globally, with users being the least likely among major audio and video streaming platforms to cancel their subscriptions.
However, Spotify’s financial journey has not always been smooth. The company’s stock plummeted by over two-thirds in 2022 due to several quarters of operating losses. In early 2023, Spotify announced a reduction of 600 jobs, and less than a year later, it cut 1,500 positions, representing approximately 17% of its workforce.