Spotify has reported a record profit for the second quarter, marking a significant turnaround after raising the price of its Premium plans for the first time last year. The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million), a substantial improvement from a loss of 247 million euros ($268 million) in the same quarter last year. The platform also saw its monthly active users increase by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism in a statement, saying, “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 an increase in prices for its Premium users in the U.S. Starting this month, users on individual plans will pay an additional $1, bringing the total to $12, while Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This price hike was the first in 13 years for Spotify, which increased membership fees by an average of $1 last July.
Despite these price increases, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are the least likely to cancel their memberships compared to users of other streaming platforms.
However, the company faced significant challenges in 2022, with its stock value dropping by more than two-thirds amid operational losses. In January 2023, Spotify announced a reduction of 600 jobs, and later that year, it cut an additional 1,500 positions, roughly 17% of its workforce.