Spotify has achieved record profits in its latest quarterly report, marking a significant turnaround since it first raised prices for its Premium plans last year. The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a stark improvement from a loss of 247 million euros ($268 million) during the same period a year ago. Furthermore, the number of monthly active users surged by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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. This all bodes very well for the future.” Following the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium subscribers in the U.S., which took effect this month. Individual plans now cost $12, reflecting a $1 increase; Duo plans (for two people) rose by $2 to $17; and Family plans increased by $3, bringing the total to $20. This marked the company’s first membership cost increase in 13 years, which previously averaged $1.
Despite these price hikes, Spotify attracted seven million net new subscribers during the quarter, exceeding its earlier projections by one million. A Bloomberg analysis highlighted that Spotify remains the leading audio streaming service globally, with users being the least likely to cancel their subscriptions when compared to competitors in the audio and video streaming industry.
However, Spotify’s financial history has not always been bright. The company’s stock lost over two-thirds of its value in 2022 as it grappled with several consecutive quarters of operating losses. In response to these challenges, the company announced the layoff of 600 employees in January 2023 and subsequently cut 1,500 jobs, accounting for approximately 17% of its workforce, less than a year later.