Spotify has announced a record profit for the second quarter, one year after increasing the prices of its Premium subscription plans for the first time. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. The platform also saw a 14% annual increase in monthly active users, reaching 626 million.
In a statement, CEO Daniel Ek expressed enthusiasm about the company’s progress, emphasizing Spotify’s innovation and growth as both a product and a business, which has surpassed their own expectations. Following the positive earnings announcement, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its U.S. Premium users. Starting this month, individual plan subscribers will see an increase of $1, bringing the total to $12. Duo plans will increase by $2 to $17, while Family plans will go up by $3 to $20. This marked the first membership price increase in 13 years when the company raised costs by an average of $1 in July 2022. Despite these increases, Spotify welcomed seven million net new subscribers in the quarter, exceeding its earlier expectations by one million.
Spotify remains the leading audio streaming service globally, and recent analysis from Bloomberg indicates 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 response, the company laid off 600 employees in January 2023 and later cut 1,500 jobs, which represented around 17% of its workforce.