Spotify has announced another quarter of record profits following its first-ever price increase for Premium plans a year ago. In the second quarter, the Swedish audio streaming company reported an operating income of 266 million euros ($289 million), a significant recovery from a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s current 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the release of its earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium services in the U.S., which took effect this month. Individual plan users will see their monthly fee increase by $1 to $12. Duo plans will rise by $2 to $17, while Family plans will go up by $3 to $20. This marks the first membership cost adjustment in 13 years, with the previous average increase being $1 in July 2022.
Despite these price increases, Spotify successfully added seven million net subscribers in the quarter, exceeding their earlier guidance by one million.
As the world’s leading audio streaming service, Spotify has the lowest membership cancellation rates among major audio and video streaming platforms, according to a Bloomberg analysis. However, the company’s financial performance has had its challenges; in 2022, Spotify’s stock plummeted by more than two-thirds amid recurring operating losses. In January 2023, the company announced the layoff of 600 employees and less than a year later, it cut an additional 1,500 jobs, amounting to about 17% of its workforce.