Spotify has reported a record profit for the second quarter, just a year after raising the prices of its Premium plans for the first time. The Swedish audio streaming platform experienced an operating income of 266 million euros ($289 million), a significant turnaround from its loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% year-on-year increase in monthly active users, reaching 626 million.
In a statement, CEO Daniel Ek expressed enthusiasm 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 on Tuesday.
In June, the company announced a price hike for its Premium users in the U.S. Beginning this month, individual plan users will see an increase of $1, bringing the total to $12, while Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. Last July marked the first membership price raise in 13 years, averaging $1.
Despite these increases, Spotify added seven million net subscribers in the quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with users reportedly less likely to cancel their memberships compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past, losing more than two-thirds of its stock value in 2022 due to several quarters of operating losses. Earlier this year, Spotify announced plans to cut 600 jobs, and less than a year later, it reduced its workforce by an additional 1,500 employees, representing about 17% of its staff.