Spotify has announced a record profit for the second quarter, marking a successful year since it first increased the prices of its Premium subscription plans. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the latest quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. The platform’s monthly active users also rose by 14%, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, stating that Spotify continues to innovate and is proving itself as not only a great product but also a strong business. Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its Premium subscriptions in the U.S. beginning this month. Individual plan users will see a rise of $1 to $12, Duo plans will go up by $2 to $17, and Family plans will increase by $3 to $20. This follows an average price hike of $1 last July, the first increase in 13 years.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous guidance by one million. According to a Bloomberg analysis, Spotify is the leading audio streamer worldwide, with users showing the least likelihood of canceling their subscriptions compared to other audio and video streaming platforms.
However, Spotify’s financial journey has been challenging; the stock plummeted over two-thirds in value during 2022 due to continued operating losses. In January 2023, the company announced layoffs affecting 600 employees, and less than a year later, it made further cuts by laying off 1,500 employees, roughly 17% of its workforce.