Spotify has reported record profits for the second quarter, a year after implementing its first-ever price increase for Premium subscriptions. The Swedish audio streaming service posted an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The platform also saw a 14% increase in monthly active users, 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.”
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 its Premium service in the U.S., effective this month. Individual plan users would see an increase of $1 to $12, Duo plan users would pay $2 more at $17, and Family plan users would face a $3 increase to $20. This price adjustment followed an average $1 increase in membership costs last July, which was the first hike in 13 years.
Despite these price increases, Spotify managed to add seven million net subscribers in the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify’s users are reportedly the least likely to cancel their memberships compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial history has not always been robust. In 2022, Spotify’s stock plummeted by over two-thirds amid several operational losses. Earlier this year, the company announced a reduction of 600 jobs, followed by another round of layoffs affecting 1,500 employees, amounting to roughly 17% of its workforce.