Spotify has reported a record profit for the second quarter, marking a turnaround after it raised prices for its Premium plans for the first time last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same quarter last year. Monthly active users increased by 14% year-over-year, reaching 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.” He noted that the achievements are unfolding on a timeline that has surpassed expectations, which bodes well for the future.
Following this positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium services in the U.S. Starting this month, individual plan users will see an increase of $1 (now $12), two-person Duo plans will cost $2 more (now $17), and Family plans will increase by $3 (now $20). The company raised membership fees for the first time in 13 years in July, adjusting prices by an average of $1.
Despite the price increases, Spotify attracted seven million new subscribers in the latest quarter, exceeding previous projections by one million.
Ranking as the world’s leading audio streaming service, Spotify’s users are reportedly the least likely to cancel their subscriptions, according to a Bloomberg analysis. However, the company faced significant challenges last year, seeing its stock value drop by more than two-thirds in 2022 and experiencing multiple quarters of operating losses. In January 2023, Spotify announced plans to cut around 600 jobs, followed by a further reduction of 1,500 positions, approximately 17% of its workforce, less than a year later.