Spotify has reported another quarter of record profits, a year after it increased the prices of its Premium subscription plans for the first time. The Swedish audio streaming company announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) in the same period last year. Its monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the strong earnings report, Spotify’s stock saw a nearly 14% increase in pre-market trading on Tuesday.
In June, Spotify announced a price hike for Premium users in the U.S. Starting this month, individual plan subscribers will see an increase of $1 to $12, Duo plan users will pay $2 more for a total of $17, and Family plan subscribers will face a $3 increase, bringing their costs to $20. This price adjustment follows a previous increase last July, which marked the first rise in membership costs in 13 years by an average of $1.
Despite the price increases, Spotify added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the world’s leading audio streaming service, Spotify users are reportedly the least likely to cancel their subscriptions among major audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. Spotify’s stock plummeted by more than two-thirds in 2022 as the company experienced multiple quarters of operating losses. In January 2023, Spotify announced a reduction of 600 jobs, followed by an additional cut of 1,500 positions, which accounts for approximately 17% of its workforce, less than a year later.