Spotify has announced another quarter of record profits, following its first-ever price increase for Premium plans just a year ago. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, contrasting a significant loss of 247 million euros ($268 million) from the same period last year. The number of monthly active users rose 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. 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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for U.S. Premium users, effective this month. Individual plan subscribers will now pay $12, up by $1; Duo plan users will see an increase of $2 to $17; while Family plan subscribers will be charged $20, an increase of $3. Last July marked the first membership cost increase in 13 years, averaging an additional dollar.
Despite these price hikes, the company added 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 showing that its users are the least likely among audio and video streaming platforms to cancel their subscriptions. However, the company has faced challenging financial periods in the past, with its stock declining by more than two-thirds in 2022 due to several quarters of losses. In early 2023, it announced the dismissal of 600 employees, followed by another round of layoffs affecting 1,500 jobs, which accounts for approximately 17% of its workforce.