Spotify has announced another quarter of record profits, marking a year since it first raised prices on its Premium plans. The Swedish audio streaming service reported 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 have 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 added that the growth timeline has exceeded their expectations, indicating a positive outlook for the future.
Following the release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. The company had previously announced a price increase for its Premium services in the U.S. Starting this month, individual plans will now cost $12, an increase of $1; Duo plans will go up to $17, an increase of $2; and Family plans will rise to $20, an increase of $3. This marks the first price adjustment in 13 years, with an average increase of $1 implemented last July.
Notably, despite the price hikes, Spotify added seven million net subscribers during the quarter, surpassing its guidance by one million. According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with users demonstrating lower cancellation rates than those of other audio or video streaming platforms.
However, the company’s financial trajectory has not always been positive. In 2022, Spotify’s stock value plummeted by more than two-thirds amid multiple quarters of operational losses. In January 2023, the company announced a layoff of 600 employees and, less than a year later, cut an additional 1,500 jobs, accounting for approximately 17% of its workforce.