Spotify has announced record profits for the second quarter, following a price increase for its Premium plans implemented last year. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million), a notable turnaround from a loss of 247 million euros ($268 million) during the same period in 2022. Monthly active users also saw significant growth, increasing by 14% year-over-year to reach 626 million.
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. This all bodes very well for the future.”
In reaction to this positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
Earlier in June, Spotify announced price hikes for its Premium plans in the U.S. Starting this month, individual plan users will see an increase of $1 to $12, Duo plan subscribers will have to pay $2 more, bringing their total to $17, and Family plan users will face a $3 increase to $20. This was the first membership cost increase in 13 years, with an average rise of $1 implemented last July.
Despite the price adjustments, Spotify managed to add seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming platform globally, Spotify has demonstrated a strong retention rate among its users, who are less likely to cancel their subscriptions compared to other audio or video streaming services, according to Bloomberg.
However, the company has faced challenges in recent years, losing more than two-thirds of its stock value in 2022 due to consecutive quarters of operating losses. In early 2023, Spotify announced a reduction of 600 employees, followed by a further cut of 1,500 jobs—approximately 17% of its workforce—less than a year later.