Spotify has announced a record profit for the second quarter, marking a significant turnaround since it first raised the prices of its Premium plans last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a notable improvement from a loss of 247 million euros ($268 million) during the same period in 2022. Monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s trajectory, 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.” He added that the company’s progress has exceeded their expectations, suggesting a positive outlook for the future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
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, Duo plan users will now pay $2 more, totaling $17, and Family plan users will pay $3 more, bringing the total to $20. This marked the first price hike in 13 years, following an average increase of $1 in July 2022.
Despite the higher prices, Spotify successfully added seven million net subscribers in the latest quarter, surpassing its previous estimates by one million.
Spotify remains the leading audio streaming service globally, with research indicating that its users are less likely than those of other streaming platforms to cancel their subscriptions. However, the company has faced financial challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds due to several quarters of operating losses. In January 2023, Spotify announced a reduction of 600 employees, followed by a further cut of 1,500 jobs, nearly 17% of its workforce, less than a year later.