Spotify has announced a record profit for the second quarter, marking a significant turnaround since it raised the price of its Premium plans for the first time last year. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users climbed 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed optimism, 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 strong earnings report, Spotify’s stock surged by nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium services in the U.S. Beginning this month, individual plan subscribers will see their monthly fees rise by $1 to $12, while Duo plans will increase by $2 to $17, and Family plans will be $3 more at $20. This price hike came after the company raised membership costs for the first time in 13 years by an average of $1 in July.
Despite the price increases, Spotify successfully gained seven million net subscribers in the last quarter, surpassing its prior expectations by one million. A Bloomberg analysis identified Spotify as the leading audio streaming service globally, noting its users are the least likely to cancel their subscriptions compared to other audio and video streaming platforms.
However, Spotify’s financial journey has faced challenges. In 2022, the company’s stock plummeted by more than two-thirds amid operational losses, prompting a workforce reduction of 600 employees in January 2023, followed by an additional cut of 1,500 jobs—about 17% of its total staff—less than a year later.