Spotify achieved record profits for the second quarter, marking a significant turnaround a year after it raised the prices of its Premium subscription plans for the first time in its history. The Swedish audio streaming platform 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 a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed his enthusiasm about the company’s 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. In June, the company announced a price increase for its Premium subscriptions in the U.S. Starting in October, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more to reach $17, and Family plan users will face a $3 hike to $20. This move followed a previous membership cost increase, the first in 13 years, which averaged $1.
Despite these price hikes, Spotify added seven million net subscribers this quarter, exceeding its initial guidance by one million. A Bloomberg analysis highlighted that Spotify remains the most popular audio streaming service globally, with its users being the least likely among competitors to cancel their subscriptions.
However, Spotify’s financial journey has not been without challenges. The company’s stock fell by over two-thirds in 2022 due to multiple quarters of operating losses. In early 2023, Spotify announced plans to reduce its workforce by 600 employees, followed by another round of layoffs affecting 1,500 employees, or about 17% of its staff, less than a year later.