Spotify has announced a record profit for the second quarter, marking a significant turnaround since raising its Premium plan prices for the first time last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a stark contrast to a loss of 247 million euros ($268 million) in the same quarter the previous year. Monthly active users also increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism 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 this positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium plans in the U.S., starting this month. Individual plan users will see a $1 increase to $12, while Duo plans will now cost $17 (up by $2), and Family plans will rise by $3 to $20. This change followed an average price hike of $1 implemented last July, the first in 13 years.
Despite the higher prices, Spotify managed to attract seven million net new subscribers in the quarter, surpassing its earlier projections by one million. According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with users showing a lower tendency to cancel their subscriptions compared to other platforms.
However, Spotify has faced rough financial times in the past. In 2022, the company’s stock plummeted by more than two-thirds as it experienced several quarters of operational losses. In early 2023, the company announced a plan to lay off 600 employees, followed by another reduction of 1,500 jobs, accounting for approximately 17% of its workforce, less than a year later.