Spotify has announced another quarter of record profits, one year after increasing the prices of its Premium plans for the first time. The Swedish audio streaming platform 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 number of monthly active users has also seen a 14% annual increase, reaching 626 million.
“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,” stated CEO Daniel Ek. He emphasized that the company’s progress has outpaced even their own expectations, suggesting a positive outlook for future growth.
Following the announcement of better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify declared it would be raising prices for Premium users in the U.S. Starting this month, individual plan users will see an increase of $1, bringing the cost to $12. Duo plan users will pay $2 more, now at $17, and Family plan users will see their costs rise by $3 to $20. This marks the first increase in membership costs in 13 years, with an average rise of $1 implemented in July of the previous year.
Despite these price hikes, the company successfully added seven million net subscribers in the quarter, exceeding its earlier guidance by one million.
Spotify remains the leading audio streaming service globally, with users demonstrating the highest retention rates compared to other audio or video streaming platforms, according to an analysis by Bloomberg.
However, the company faced significant challenges in the past, with Spotify’s stock losing over two-thirds of its value in 2022 amid several quarters of operating losses. In early 2023, it announced the layoff of 600 employees and less than a year later slashed 1,500 jobs, representing roughly 17% of its workforce.