Spotify has reported record profits for another quarter, following its first-ever price increase for Premium plans a year ago. 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 number of monthly active users rose by 14% year-over-year, reaching 626 million.
In a statement, 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 earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company announced an increase in Premium prices for U.S. users, which took effect this month. Individual plans now cost $12, up by $1; Duo plans rise by $2 to $17; and Family plans increase by $3 to $20. This marked the first price hike in 13 years, with the average membership fee going up by $1 last July.
Despite these increases, Spotify added seven million net subscribers in the quarter, surpassing its own projections by one million. According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with users less likely to cancel their subscriptions compared to other audio and video streaming platforms.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock lost over two-thirds of its value due to several quarters of operating losses. In January 2023, it announced it would reduce its workforce by 600 employees, and less than a year later, another 1,500 jobs were cut, equating to about 17% of its staff.