Spotify has announced another record profit in its recent quarterly report, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year. The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement from a loss of 247 million euros ($268 million) during the same period last year. The platform also saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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. This all bodes very well for the future.” Following the release of its positive earnings report, Spotify’s stock surged by nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscriptions in the U.S., effective this month. Individual plan users will now pay $12, an increase of $1, while Duo plan users will see a $2 hike to $17, and Family plans will cost $20, up by $3. This marked the first membership price adjustment in 13 years, which averaged around $1.
Despite these price hikes, Spotify welcomed seven million new subscribers in the quarter, exceeding its expectations by one million. According to a Bloomberg analysis, Spotify remains the world’s leading audio streaming service, with users showing the lowest likelihood of canceling their subscriptions compared to other platforms.
However, Spotify’s financial landscape has not always been positive. The company experienced a drastic decline in stock value, losing more than two-thirds in 2022, and faced several quarters of operating losses. In January 2023, Spotify announced the layoff of 600 employees, followed by further job cuts affecting 1,500 staff members, which is roughly 17% of its workforce.