Spotify has announced its latest quarterly results, showcasing record profits just a year after implementing its first-ever price increase for Premium subscriptions.
The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. The company also noted a 14% increase in monthly active users, bringing the total to 626 million.
“We are in an exciting phase at Spotify. We continue to innovate, demonstrating that we are not only a leading product but also an increasingly successful business,” stated CEO Daniel Ek. He expressed confidence that the company is progressing ahead of expectations, which suggests a promising future.
On the heels of this optimistic earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the United States. Starting this month, individual plan subscribers will pay $12, an increase of $1, while those on Duo plans will pay $17, which is up by $2, and Family plans will cost $20, reflecting a $3 increase. This was the first price hike in 13 years, involving an average increase of $1.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, surpassing its own guidance by one million.
Spotify remains the leading audio streaming provider globally, with a Bloomberg analysis indicating that its subscribers are less likely to cancel their memberships compared to users of other streaming services. However, the company has faced significant challenges in the past, with its stock plummeting more than two-thirds in 2022 due to multiple quarters of operating losses. In early 2023, Spotify announced substantial layoffs affecting 600 employees, followed by an additional cut of 1,500 jobs, accounting for roughly 17% of its workforce.