Spotify has announced a record profit for the second quarter, marking a significant turnaround following a pricing increase for its Premium plans last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the quarter, a remarkable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the platform’s monthly active users surged by 14% year-on-year, reaching 626 million.
In a statement, CEO Daniel Ek expressed excitement over Spotify’s growth, emphasizing the company’s commitment to innovation and business development that has surpassed their expectations. Following the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading.
Earlier this month, Spotify implemented price increases for its Premium users in the U.S. Individual plans saw a $1 increase to $12, while Duo plans rose by $2 to $17, and Family plans increased by $3 to $20. This was the first price adjustment in 13 years, which occurred last July when the company raised membership costs by an average of $1. Despite these increases, Spotify managed to add seven million net subscribers during the quarter, exceeding its prior guidance by one million.
As the leading audio streaming service globally, Spotify’s users have shown a lower tendency to cancel their memberships compared to competitors, according to a Bloomberg analysis. However, the company faced challenges in the past, with its stock value plummeting by more than two-thirds in 2022 due to operating losses. In response, Spotify laid off 600 employees in January 2023, followed by a further reduction of 1,500 jobs, representing approximately 17% of its workforce.