Spotify has announced a record profit in its latest quarter, marking a significant improvement since it raised the prices of its Premium plans for the first time a year ago. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, recovering from a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users also saw a 14% increase year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s future, 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. We are doing so on a timeline that has exceeded even our own expectations.”
Following the announcement of its better-than-expected earnings, Spotify’s stock rose nearly 14% in pre-market trading.
In June, the company revealed an increase in prices for U.S. Premium users. Starting this month, individual plans will cost $12, up by $1, while Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This change followed a previous average membership cost increase of $1 after 13 years of maintaining prices.
Despite the hikes, Spotify successfully added seven million net subscribers in the quarter, exceeding its initial guidance by one million. A Bloomberg analysis suggests Spotify remains the most popular audio streaming service globally, with users showing a lower likelihood of canceling their memberships compared to other audio or video streaming platforms.
However, the company’s journey hasn’t been without its challenges. In 2022, Spotify’s stock value plummeted by more than two-thirds amid several quarters of operating losses. Earlier this year, the company announced layoffs affecting 600 employees, with an additional 1,500 job cuts occurring later, representing roughly 17% of its workforce.