Spotify has announced a record profit for the second quarter, marking a significant turnaround one year after implementing its first-ever price increase for Premium subscriptions.
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) during the same period last year. The company also saw its monthly active users surge by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s performance, 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 this 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 rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its U.S. Premium users. Beginning this month, individual plan subscribers will pay $12, an increase of $1, while Duo plan subscribers will face an increase of $2 to $17, and Family plan users will see a $3 increase to $20. This follows an average membership cost increase of $1 that took effect last July, the first in 13 years.
Despite these price increases, Spotify successfully added seven million net subscribers during the quarter, exceeding its earlier guidance by one million.
A Bloomberg analysis revealed that Spotify is the leading audio streaming service globally, with its users being the least likely among streaming services to cancel their subscriptions.
However, the company has faced financial challenges in the past. Spotify’s stock plummeted by more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, the company announced it would lay off 600 employees, followed by another reduction of approximately 1,500 jobs, accounting for roughly 17% of its workforce, less than a year later.