Spotify has announced a record profit for the second quarter, marking a significant turnaround since it increased the price of its Premium plans for the first time last year. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the quarter, in contrast to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also climbed by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism 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 noted that the company’s performance has surpassed expectations, suggesting a promising future ahead.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify implemented price increases for its Premium subscriptions in the U.S. Starting this month, individual plan fees rose by $1 to $12, Duo plan fees increased by $2 to $17, and Family plan fees went up by $3 to $20. The company had initiated membership cost hikes last July for the first time in 13 years, averaging an increase of $1.
Despite the price hikes, Spotify gained seven million net subscribers during the quarter, exceeding its previous forecast by one million. A Bloomberg analysis revealed that Spotify remains the leading audio streaming service globally, with users demonstrating the lowest likelihood of cancelling their subscriptions compared to other major audio and video streaming platforms.
However, Spotify has encountered financial challenges in the past. The company’s stock lost over two-thirds of its value in 2022 following several quarters of operating losses. In January 2023, it announced the layoff of 600 employees, and less than a year later, it reduced its workforce by an additional 1,500 jobs, representing approximately 17% of its total staff.