Spotify has reported another record profit for the quarter, following its first increase in Premium plan prices 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) during the same period last year. The company also saw a 14% increase in monthly active users, 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 this positive earnings report, Spotify’s stock experienced a nearly 14% increase in pre-market trading on Tuesday.
Earlier in June, Spotify announced price hikes for its Premium subscriptions in the U.S., effective this month. Individual plan users will see an increase of $1 to $12, Duo plan users will pay $2 more, bringing their total to $17, and Family plan users will face a $3 increase, now totaling $20. This pricing change came after the company raised membership costs for the first time in 13 years by an average of $1 in July.
Despite these price increases, Spotify managed to add seven million net subscribers in the last quarter, exceeding its previous guidance by one million.
As the leading audio streaming service worldwide, Spotify also ranks as the least likely platform for users to cancel subscriptions, according to a Bloomberg analysis. However, the company’s financial journey has faced challenges, having lost more than two-thirds of its stock value in 2022 due to multiple quarters of operating losses. In January 2023, Spotify announced plans to cut 600 jobs and followed this with a further reduction of 1,500 positions, accounting for approximately 17% of its workforce.