Spotify has announced continued record profits for the second quarter, nearly a year after implementing a price increase for its Premium subscription plans. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. The company also saw its monthly active users rise by 14% year-over-year, reaching a total of 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday. In June, the company announced a price increase for U.S. Premium users, effective this month. Individual plans will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This marked the first price adjustment in 13 years, following a $1 increase in membership costs last July.
Despite the price hikes, Spotify added seven million net subscribers during the quarter, surpassing its forecasts by one million. A Bloomberg analysis noted that Spotify remains the leading audio streaming service globally, with its subscribers being less likely to cancel their memberships compared to other platforms.
However, the company has faced challenges in the past. In 2022, Spotify’s stock plummeted by over two-thirds due to several quarters of operating losses. In January 2023, the company announced layoffs of 600 employees, followed by more cuts less than a year later, reducing its workforce by approximately 17% with an additional 1,500 job eliminations.