Spotify has reported another record profit for the second quarter, marking a significant turnaround since it raised its Premium plan prices for the first time last year. The company achieved an operating income of 266 million euros ($289 million), a stark contrast to the 247 million euro ($268 million) loss reported during the same quarter last year. Monthly active users rose by 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed excitement 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. 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 price increases for its Premium plans in the U.S., effective this month. 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. This raised membership costs for the first time in 13 years by an average of $1.
Despite these price hikes, Spotify was able to grow its subscriber base by seven million net additions during the quarter, surpassing its guidance by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating its users are the least likely to cancel their subscriptions compared to other streaming platforms.
However, the company has faced financial challenges in the past, with its stock plummeting by more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, Spotify announced job cuts of 600 employees, followed by another reduction of 1,500 jobs, approximately 17% of its workforce, less than a year later.