Spotify has announced another record-breaking quarter of profits, marking a significant turnaround since it increased the prices of its Premium plans for the first time in history. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) from the same period last year. The number of monthly active users surged by 14% year-over-year to reach 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. This timeline has exceeded even our own expectations, which bodes very well for the future.”
Following the release of its impressive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading.
In June, Spotify announced price increases for its Premium offerings in the U.S. Beginning this month, individual plan users will see their monthly fee rise by $1 to $12, Duo plan users will pay $2 more at $17, and Family plan users will pay an additional $3, totaling $20. This price hike followed an average increase of $1 in July 2022, marking the first membership cost adjustment in 13 years.
Despite the price increases, Spotify managed to gain seven million net subscribers during the quarter, surpassing its previous forecast by one million. A Bloomberg analysis revealed that Spotify is the leading audio streaming service globally and has the lowest likelihood of users canceling their memberships compared to other streaming platforms.
However, the company faced financial challenges in the past, with its stock value dropping by over two-thirds in 2022 amid a series of operating losses. In January 2023, Spotify announced a reduction of 600 employees and less than a year later, it eliminated 1,500 jobs, accounting for approximately 17% of its workforce.