Spotify has announced significant profits for the second quarter, marking a notable turnaround since it raised prices for its Premium plans last year. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) in the same quarter of the previous year. Monthly active users reached 626 million, reflecting a 14% increase year-over-year.
CEO Daniel Ek expressed enthusiasm about the company’s progress, stating, “It’s an exciting time at Spotify. We keep 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 announcement, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its Premium subscriptions in the U.S. Starting in July, individual plans rose by $1 to $12, Duo plans increased by $2 to $17, and Family plans went up by $3 to $20. This marked the first membership cost hike in 13 years, during which the average increase was also $1.
Despite the price adjustments, Spotify was able to add seven million net subscribers in the last quarter, exceeding its own projections by one million. A Bloomberg analysis highlighted that Spotify remains the dominant audio streaming service globally, with users showing a lower likelihood of canceling their subscriptions compared to other streaming platforms.
However, Spotify’s recent history has not been without challenges, having lost more than two-thirds of its stock value in 2022 amid consecutive quarters of operating losses. Earlier this year, the company laid off 600 employees and later cut an additional 1,500 jobs, representing about 17% of its workforce.