Spotify has announced a record profit for the second quarter, marking a significant turnaround after raising its Premium plan prices for the first time last year.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a stark improvement compared to the loss of 247 million euros ($268 million) in the same quarter last year. The number of monthly active users increased by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We keep on innovating and demonstrating that we are not just a great product but are also evolving into a great business,” stated CEO Daniel Ek. He added that recent developments have surpassed the company’s expectations, indicating a promising future.
Following this positive earnings report, Spotify’s stock surged by almost 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscriptions in the U.S. Effective this month, individual plan users will pay an additional $1, bringing the cost to $12 per month. Duo plans, designed for two people, will see a $2 increase to $17, while Family plans will rise by $3 to $20. This was the first price hike in 13 years, with an average increase of $1 last July.
Despite these price adjustments, Spotify welcomed seven million new subscribers in the last quarter, exceeding its own projections by one million.
Spotify remains the leading audio streaming platform globally, with users less likely to cancel subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the company’s financial history has faced challenges. Last year, Spotify’s stock value plummeted by over two-thirds due to several quarters of losses. In January 2023, the company announced layoffs of 600 employees, followed by another round of job cuts affecting 1,500 employees, or about 17% of its workforce, less than a year later.