Spotify has announced another record-breaking quarter of profits, following a price increase for its Premium subscription plans introduced for the first time last year. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, rebounding from a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s trajectory, 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 release of its positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced price hikes for its U.S. Premium users, effective this month. Individual plan subscribers will see an increase of $1, bringing the total to $12, while Duo plan users will pay $2 more, totaling $17, and Family plan users will see a $3 increase, now paying $20. This marked the first membership price increase in 13 years, with an average increase of $1 implemented last July.
Despite the price adjustments, Spotify managed to add seven million net subscribers in the quarter, one million more than its previous forecasts. The platform remains the leading audio streaming service globally, with users showing the least likelihood of canceling subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, Spotify’s financial journey has seen its share of struggles. The company’s stock fell by over two-thirds in value throughout 2022 due to several quarters of operating losses. In early 2023, Spotify announced it would reduce its workforce by 600 employees, and less than a year later, it laid off 1,500 staff members, approximately 17% of its workforce.