Spotify has reported a record profit for another quarter, following a historic price increase of its Premium plans last year. The Swedish audio streaming service revealed an operating income of 266 million euros (approximately $289 million) for the second quarter, contrasting with a loss of 247 million euros ($268 million) during the same period a year prior. The number of monthly active users rose by 14% year-over-year, reaching 626 million.
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 earnings announcement, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced it would increase prices for its U.S. Premium users. Effective this month, individual plan subscribers will see their monthly fee rise by $1 to $12, Duo plan subscribers will pay $2 more for a total of $17, and Family plan users will pay $3 more, bringing their total to $20. This marked the company’s first increase in membership costs in 13 years, with an average increase of $1 implemented last July.
Despite the higher prices, Spotify managed to gain seven million net subscribers during the quarter, exceeding its previous growth forecast by one million.
Ranked as the leading audio streaming platform globally, Spotify users are the least likely among audio and video streaming services to cancel their subscriptions, according to a Bloomberg analysis. However, the company has faced significant financial challenges in the past, with its stock value plummeting more than two-thirds in 2022 due to multiple quarters of operating losses. In early 2023, Spotify announced layoffs affecting 600 employees, followed by a larger reduction of 1,500 jobs, representing about 17% of its workforce less than a year later.