Spotify has announced another record-breaking quarter, marking a significant financial turnaround since it implemented a price increase on its Premium plans for the first time ever.
In its second quarter report, the Swedish audio streaming service revealed an operating income of 266 million euros ($289 million), a stark contrast to the loss of 247 million euros ($268 million) recorded in the same period last year. The company also reported a 14% yearly increase in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed optimism about the company’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. 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 report, Spotify’s stock saw a nearly 14% increase in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its U.S. Premium users, effective this month. Individual plan subscribers will now pay $12, an increase of $1, while Duo plan users will see their prices rise by $2 to $17, and Family plan subscribers will pay $20, up by $3. This marked the first price adjustment in 13 years, when the company raised membership fees by an average of $1.
Despite the increased costs, Spotify managed to gain seven million net new subscribers during the quarter, surpassing its own projections by one million.
A Bloomberg analysis indicated that Spotify remains the most popular audio streaming platform globally, with users showing a lower tendency to cancel their subscriptions compared to other audio or video streaming services.
However, Spotify’s financial journey has not been without challenges. The company’s stock value plummeted over two-thirds in 2022, which was accompanied by several quarters of operating losses. In early 2023, Spotify announced layoffs affecting 600 employees, which was followed by another round of cuts impacting 1,500 jobs, representing approximately 17% of its workforce.