Spotify has announced record profits for the second quarter, marking a significant turnaround from the previous year after it implemented price increases for its Premium plans. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for 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 release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced an increase in Premium subscription prices for U.S. users, effective this month. Individual plan users will see a $1 increase to $12, Duo plan prices will rise by $2 to $17, and Family plan users will pay $3 more, bringing the total to $20. This marked the first price change in 13 years.
Despite the price hikes, Spotify successfully gained seven million net subscribers during the quarter, exceeding its previous projections by one million. The company remains the leading audio streaming service globally, with users showing a lower tendency to cancel their memberships than those of other audio and video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has had its challenges. In 2022, the company’s stock value plummeted by more than two-thirds, and it faced multiple quarters of operating losses. In response to these difficulties, Spotify announced layoffs of 600 employees in January 2023 and a further reduction of 1,500 jobs, representing roughly 17% of its workforce, less than a year later.