Spotify has announced a record-breaking quarter of profits, following its first-ever increase in Premium plan prices last year.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement from a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users also rose by 14% year-over-year, reaching 626 million.
In a statement, CEO Daniel Ek expressed enthusiasm about 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.”
Following the announcement, Spotify’s stock surged nearly 14% in pre-market trading due to the stronger-than-expected earnings report.
In June, Spotify revealed a price increase for its Premium users in the United States. As of this month, individual plan users will see an increase of $1 (totaling $12), Duo plan users will pay $2 more ($17), and Family plan subscribers will incur an additional charge of $3 ($20). This marks the company’s first price hike in 13 years, averaging an increase of $1.
Despite these price adjustments, Spotify welcomed seven million new net subscribers in the quarter, exceeding its previous guidance by one million.
According to a Bloomberg analysis, Spotify remains the world’s leading audio streaming service, with its users demonstrating the lowest likelihood of canceling their subscriptions compared to rival platforms. However, the company has faced challenges in the past; in 2022, Spotify’s stock lost over two-thirds of its value as it dealt with multiple quarters of operating losses. By January 2023, the company announced layoffs totaling 600 employees, followed by a further reduction of 1,500 jobs, approximately 17% of its workforce, less than a year later.