Spotify has reported record profits for the second quarter, marking a significant turnaround after implementing a price increase for its Premium subscriptions last year. The Swedish audio streaming platform earned an operating income of 266 million euros ($289 million), contrasting with a loss of 247 million euros ($268 million) in the same period last year. The company also saw a 14% annual growth in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed excitement over the company’s progress, 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. This all bodes very well for the future.”
Spotify’s stock surged nearly 14% in pre-market trading following the favorable earnings report.
In June, the company announced a price hike for U.S. Premium users, effective this month. Individual plan users will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will see a $3 increase to $20. This price adjustment followed a similar increase last July, which was the first in 13 years.
Despite the price increases, Spotify managed to add seven million net subscribers in the quarter, exceeding its own guidance by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with users being the least likely among streaming platforms to cancel their subscriptions. However, the company faced significant challenges in the past, with its stock losing more than two-thirds of its value in 2022 due to several operating losses. Earlier this year, Spotify announced layoffs of 600 employees and later reduced its workforce by an additional 1,500 jobs, representing about 17% of its staff.