Spotify has announced another quarter of record profits, following its first-ever price increase for its 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) during the same period last year. Monthly active users surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, noting that Spotify is not only enhancing its product but also demonstrating strong business performance. This success has led to a nearly 14% surge in Spotify’s stock during pre-market trading after the release of its earnings report.
In June, Spotify announced new price increases for its Premium users in the U.S. Starting this month, individual plans will increase by $1 to $12, Duo plans will rise by $2 to $17, and Family plans will see a $3 increase to $20. This follows last July’s increase, which was the first in 13 years, averaging an additional dollar per membership.
Despite these price hikes, Spotify managed to gain seven million net subscribers in the quarter, exceeding its previous guidance by one million. The platform maintains its status as the leading audio streaming service globally, with analysis indicating that its users are less likely to cancel their subscriptions compared to other streaming services.
However, Spotify’s financial journey has not been without challenges. In 2022, the company’s stock experienced a steep decline, losing over two-thirds of its value as it grapples with operating losses. Earlier this year, Spotify implemented workforce reductions, cutting 600 employees in January and another 1,500 jobs—or approximately 17% of its workforce—less than a year later.