Spotify has reported a record profit for another 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) during the same period last year. Monthly active users increased by 14% to reach 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 noted that the company’s performance has exceeded expectations, indicating a positive outlook for the future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced that it would be increasing prices for U.S. Premium users. Beginning this month, individual plan users will see an increase of $1, bringing their total to $12. Duo plans will rise by $2 to $17, while Family plans will go up by $3, costing $20. Last July marked the first membership price hike in 13 years, averaging an increase of $1.
Despite these price hikes, Spotify experienced a net gain of seven million subscribers this quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally and analysis from Bloomberg indicates that its users are less likely to cancel their memberships compared to other audio and video streaming services. However, the company has faced challenges in its financial performance; in 2022, Spotify’s stock value plummeted by over 66% due to several quarters of operating losses. Earlier this year, the company announced layoffs of 600 employees, followed by an additional 1,500 job cuts, accounting for about 17% of its workforce.