Spotify has announced another quarter of record profits one year after implementing its first-ever price increase for Premium plans.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, marking a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% annual increase in monthly active users, 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 timeline for these achievements has surpassed the company’s own expectations, signaling a positive outlook for the future.
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
Earlier in June, Spotify announced plans to increase prices for its Premium users in the U.S. Beginning this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will experience a $2 increase to $17, and Family plan customers will pay $3 more, totaling $20. This marked the company’s first price adjustment in 13 years, with an average increase of $1 implemented last July.
Despite the price hikes, Spotify added seven million net subscribers in the last quarter, exceeding its previous forecast by one million.
As the world’s leading audio streaming service, Spotify has a notably low cancellation rate among its users compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock plummeted by over two-thirds as it dealt with consecutive quarters of operating losses. In January 2023, the company announced plans to cut 600 jobs, followed by a further reduction of 1,500 positions, accounting for roughly 17% of its workforce, less than a year later.