Spotify has announced another record-breaking quarter, achieving substantial profits following its first-ever increase in Premium plan prices a year ago.
The Swedish audio streaming service 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) during the same period last year. The platform also saw its monthly active users grow by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and prove that we are not only a great product but increasingly a robust business,” stated CEO Daniel Ek. He emphasized that the company’s progress has surpassed their expectations, which is promising for the future.
Following the release of its positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users, effective this month. Individual plan subscribers will now pay $1 more, bringing the cost to $12. Duo plans will see an increase of $2 to $17, and Family plans will rise by $3 to $20. This past July, Spotify raised its membership prices for the first time in 13 years by an average of $1.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous expectations by one million.
Spotify has emerged as the leading audio streaming platform globally, and a Bloomberg analysis indicated that its users are the least likely to cancel their subscriptions compared to other streaming services.
However, Spotify’s financial journey has had its challenges. In 2022, the company’s stock lost over two-thirds of its value, coupled with several quarters of operational losses. In January 2023, Spotify announced a workforce reduction of 600 employees, and less than a year later, it cut an additional 1,500 jobs, which accounts for about 17% of its staff.