Spotify has reported another record profit quarter, following its first-ever price increase for Premium plans last year.
The Swedish audio streaming platform 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) in the same period last year. Monthly active users also 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 emphasized that their timeline has exceeded expectations, which bodes well for the future.
Following the strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S. starting this month. Individual plan subscribers will now pay $12, up by $1; Duo plan subscribers will see their costs rise by $2 to $17; and Family plan prices will increase by $3 to $20. This marks the first price adjustment for membership in 13 years, after a previous increase of about $1 last July.
Despite the recent price hikes, Spotify achieved a net gain of seven million subscribers this quarter, surpassing its earlier projections by one million.
As the leading audio streaming service globally, Spotify’s users are reportedly the least likely to cancel subscriptions compared to other audio or video streaming platforms, according to a Bloomberg analysis.
Nonetheless, Spotify’s financial journey has not been without challenges. In 2022, the company’s stock plummeted by more than two-thirds, amid consecutive quarters of operational losses. The company announced plans to reduce its workforce by 600 employees in January 2023, followed by a further cut of 1,500 jobs, which accounted for about 17% of its total staff.