Spotify has announced a record profit for the second quarter of the year, following its decision to raise the price of its Premium subscriptions for the first time ever. The Swedish audio streaming giant reported an operating income of 266 million euros (approximately $289 million), a significant turnaround from a loss of 247 million euros (around $268 million) during the same period last year. The company also saw its monthly active users rise by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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.”
In response to the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
Earlier in June, the company announced price increases for its Premium services in the U.S., effective this month. Individual plan users 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 was the first increase in membership fees in 13 years, with an average rise of $1 implemented last July.
Despite the price hikes, Spotify added seven million net subscriptions in the quarter, exceeding its previous guidance by one million. A Bloomberg analysis indicated that Spotify remains the leading audio streaming service globally, with its users being the least likely to cancel their subscriptions compared to other streaming platforms.
However, Spotify’s financial performance has not always been robust. The company faced challenges in 2022, suffering a loss of more than two-thirds of its stock value and enduring several quarters of operating losses. In January 2023, Spotify announced the layoff of 600 employees, followed by another round of cuts in less than a year, reducing its workforce by 1,500 positions, or about 17% of its total staff.