Spotify has announced another quarter of record profits, marking a year since it first raised the prices of its Premium subscriptions. 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. The number of monthly active users increased by 14% year-over-year, 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 added that their success has surpassed even their expectations, which is encouraging for the future.
Following the favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium plans in the U.S., which took effect this month. Individual plan users now pay $12, an increase of $1; Duo plan users now pay $17, up by $2; and Family plan users see a $3 hike, making it $20. This marked the first price increase in 13 years, averaging an additional $1 for membership costs.
Despite these hikes, Spotify successfully attracted seven million new subscribers during the quarter, exceeding its own projections by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely among streaming services to cancel their memberships, according to a Bloomberg analysis. However, the company has faced financial challenges in the past, with its stock plummeting more than two-thirds in value in 2022 due to multiple quarters of operating losses. In early 2023, Spotify announced layoffs of 600 employees, and within less than a year, the company reduced its workforce by 1,500 jobs, which is about 17% of its total staff.