Spotify announced record profits for the second quarter, marking a significant turnaround one year after it raised prices for its Premium subscription plans for the first time ever. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) in the same period last year. Monthly active users grew by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed excitement 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, Spotify announced price increases for its Premium plans in the U.S. Starting this month, individual plan users will see a $1 increase to $12, while Duo plan subscribers will pay $2 more to reach $17, and Family plan users will incur a $3 increase to $20. This followed a $1 average price increase for memberships last July, the first adjustment in 13 years.
Despite raising prices, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service worldwide, with a Bloomberg analysis indicating that its users are less likely than those of other audio or video streaming platforms to cancel their subscriptions. However, the company faced challenges in the past; in 2022, Spotify’s stock lost more than two-thirds of its value amid several quarters of operating losses. The company had to lay off 600 employees in January 2023 and subsequently cut an additional 1,500 jobs, approximately 17% of its workforce, less than a year later.