Spotify has announced yet another quarter of record profits, following its first-ever price increase for Premium subscriptions last year. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) a year earlier. The company also saw its monthly active users rise by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s performance, 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 jumped nearly 14% in pre-market trading on Tuesday. In June, the company announced an increase in prices for its Premium subscriptions in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan prices will rise by $2 to $17, and Family plan users will pay an additional $3, bringing the total to $20. This marked the first price adjustment in 13 years, with an average increase of $1 implemented in July 2022.
Despite these price hikes, Spotify was able to add seven million net subscribers in the last quarter, exceeding its guidance by one million. A Bloomberg analysis highlights Spotify as the leading audio streaming platform globally, noting that its users are the least likely to cancel their subscriptions compared to any major audio or video streaming services.
However, Spotify’s financial position has not always been strong. The company’s stock lost over 66% of its value in 2022 due to multiple quarters of operating losses. In January 2023, Spotify announced plans to lay off 600 employees, followed by a further reduction of 1,500 jobs—approximately 17% of its workforce—less than a year later.