Spotify has reported another quarter of record profits, marking a year since it first increased the prices of its Premium subscriptions. The Swedish audio streaming company announced 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) a year earlier. Monthly active users also surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism 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 positive earnings report, Spotify’s stock increased by nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium plans in the United States, which took effect this month. Individual plan users will now pay $12, an increase of $1; Duo plan users will see an increase to $17, up by $2; and Family plan users will now pay $20, which is an additional $3. This price adjustment came after the company raised membership fees for the first time in 13 years by an average of $1 last July.
Despite the price increases, Spotify reported adding seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are less likely than those of other audio and video streaming platforms to cancel their subscriptions. However, the company’s financial history has not always been steady. In 2022, Spotify’s stock plummeted by more than two-thirds as it navigated multiple quarters of operating losses. In January 2023, the company announced it would cut 600 positions, followed by another round of layoffs affecting 1,500 employees, or approximately 17% of its workforce, less than a year later.