Spotify has announced another record profit quarter, following its first-ever price increase for Premium plans last year.
The Swedish audio streaming platform reported 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) in the same period last year. The number of monthly active users surged by 14% year-on-year, reaching 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.” He noted that the company’s growth timeline has surpassed expectations, offering positive prospects for the future.
Following the release of its impressive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium subscribers in the U.S. Beginning this month, individual plans will increase by $1 to $12, Duo plans will go up by $2 to $17, and Family plans will rise by $3 to $20. This price adjustment comes after the company’s initial increase in membership costs last July, which was its first raise in 13 years.
Despite the higher prices, Spotify added seven million net subscribers during the quarter, exceeding its previous forecast by one million.
As the world’s leading audio streaming service, Spotify boasts a low cancellation rate compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company has faced challenges in its financial performance. In 2022, its stock plummeted by over two-thirds amid multiple quarters of operating losses. In January 2023, the company announced layoffs affecting 600 employees, followed by a further reduction of 1,500 jobs, representing about 17% of its workforce, less than a year later.