Spotify has announced another quarter of record profits, one year after it increased the prices of its Premium subscription plans for the first time. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in 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.
CEO Daniel Ek expressed excitement about Spotify’s current trajectory, 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 announcement of better-than-expected earnings, Spotify’s stock experienced a nearly 14% increase in pre-market trading on Tuesday.
In June, the company revealed plans to raise prices for its Premium services in the U.S. starting this month. Individual plan users will see an increase of $1 to $12, Duo plan subscribers will pay $2 more, totaling $17, and Family plan costs will rise by $3 to $20. This marked the first membership cost increase in 13 years, which averaged $1.
Despite these price hikes, Spotify added seven million net subscribers in the quarter, exceeding their previous guidance by one million.
As the most popular audio streaming service globally, Spotify has shown a lower likelihood of users canceling their memberships compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds as it dealt with several quarters of operating losses. In January 2023, the company announced plans to reduce its workforce by 600 employees, followed by a further reduction of 1,500 jobs, which represented about 17% of its staff, less than a year later.