Spotify has announced another quarter of record profits, following its first price increase for Premium plans last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period the previous year. The company also saw a 14% annual increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about Spotify’s growth, 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. This all bodes very well for the future.” Following the positive earnings news, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its U.S. Premium users, effective this month. Individual plan subscribers will now pay $12, an increase of $1, while Duo plans will cost $17, up by $2, and Family plans will be available for $20, an increase of $3. Prior to this, the company raised its membership fees for the first time in 13 years by an average of $1.
Despite the price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its own forecasts by one million. A Bloomberg analysis indicates that Spotify remains the world’s leading audio streaming platform, with its users showing a lower tendency to cancel their subscriptions compared to other streaming services.
However, Spotify’s journey has not been without its challenges. The company’s stock plummeted by over two-thirds in value in 2022, amidst several quarters of operating losses. Earlier this year, Spotify announced job cuts affecting 600 employees, followed by a further reduction of 1,500 jobs, which constituted about 17% of its workforce.