Spotify has announced a record profit for the second quarter, marking a significant turnaround since the company raised its Premium plan prices for the first time a year ago. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), a drastic improvement from a loss of 247 million euros ($268 million) in the same quarter the previous year. The company also saw its monthly active users grow by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism, 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 growth is outpacing even their own expectations, which bodes well for the future.
Following the announcement, Spotify’s stock surged nearly 14% in pre-market trading. In June, Spotify had disclosed an upcoming increase in Premium prices for U.S. users. Starting this month, individual plan subscribers will see a $1 increase to $12, Duo plan subscribers will pay $2 more for a total of $17, and Family plan users will see their costs rise by $3 to $20. This price hike comes after the company raised membership fees by an average of $1 for the first time in 13 years last July.
Despite the price increases, Spotify added seven million net subscribers in the latest quarter, exceeding its own estimates by one million. The platform remains the most popular audio streaming service globally, with users less likely to cancel subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
Nonetheless, Spotify’s financial history has had its challenges. In 2022, the company’s stock suffered a significant decline, losing over two-thirds of its value amid several operating losses. In early 2023, Spotify announced job cuts, eliminating 600 positions, followed by a further reduction of 1,500 jobs, which constitutes approximately 17% of its workforce.