Spotify has announced another record-breaking quarter of profits, coinciding with its first-ever increase in Premium plan prices last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant recovery from a loss of 247 million euros ($268 million) in the same period a year prior. Monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement 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 release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting this month, individual plan subscribers will see a $1 increase to $12, Duo plan subscribers will face a $2 increase to $17, and Family plan users will pay an additional $3, bringing their total to $20. This adjustment follows an average price hike of $1 for memberships last July, the first increase in 13 years.
Notably, despite these price hikes, Spotify added seven million net subscribers during the quarter, surpassing its previous forecast by one million.
As the leading audio streaming service globally, Spotify users are reported to be the least likely to cancel their subscriptions compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has been turbulent; the company lost over two-thirds of its stock value in 2022, grappling with multiple quarters of operating losses. In January 2023, it announced a workforce reduction of 600 employees, followed by another cut of 1,500 jobs—approximately 17% of its staff—less than a year later.