Spotify has reported another quarter of record profits a year after raising its Premium plan prices for the first time ever. The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) a year earlier. Additionally, the platform’s monthly active users increased by 14% year-over-year to reach 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S., which took effect this month. Users on individual plans will see an increase of $1 to $12, those on Duo plans will pay $2 more at $17, and Family plan users will need to pay $3 more, bringing their total to $20. This increase followed a membership cost hike last July, the first in 13 years, by an average of $1.
Despite the price increases, Spotify added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the world’s leading audio streaming service, Spotify users are among the least likely to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial journey hasn’t always been smooth. Spotify’s stock plummeted over two-thirds in value in 2022 amid several quarters of operational losses. In January 2023, the company announced the layoff of 600 employees, and less than a year later, it reduced its workforce by 1,500 positions, approximately 17% of its total staff.