Spotify has reported record profits for another quarter, marking a significant turnaround since it raised the price of its Premium subscriptions last year. In the second quarter, the Swedish audio streaming service posted an operating income of 266 million euros ($289 million), recovering from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users increased by 14%, reaching 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, which all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading. The company announced a price hike for its Premium users in June, which took effect this month. Individual plan users will now pay $12 per month, an increase of $1, while Duo plan subscribers will see a $2 rise to $17, and Family plan users will pay $20, a $3 increase. This marked the first membership price adjustment in 13 years, with an average increase of $1 implemented last July.
Despite these price hikes, Spotify successfully added seven million net subscribers in the quarter, surpassing its previous expectations by one million. A Bloomberg analysis found that Spotify remains the leading audio streaming platform globally, with users being the least likely to cancel their subscriptions compared to other audio and video streaming services.
However, Spotify’s financial trajectory has not always been positive. In 2022, the company’s stock plummeted by more than two-thirds due to multiple quarters of operating losses. In response, Spotify announced cuts of 600 jobs in January 2023, followed by further layoffs of approximately 1,500 positions, accounting for around 17% of its workforce, less than a year later.