Spotify has announced another quarter of record profits, marking a year since it first raised the prices of its Premium plans.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users also increased by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s progression, 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, and this all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock saw a nearly 14% increase in pre-market trading on Tuesday.
In June, the company announced price hikes for Premium users in the U.S. Starting this month, individual plan subscribers will pay $1 more, bringing their total to $12. Duo plans will see a $2 increase to $17, and Family plans will rise by $3 to $20. This marked Spotify’s first price increase in 13 years, which occurred last July with an average increase of $1.
Despite the price adjustments, Spotify successfully added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with users showing the least likelihood of canceling their memberships compared to other streaming platforms.
However, Spotify’s financial journey has not been without challenges. In 2022, the company’s stock lost over two-thirds of its value due to several quarters of operating losses. In response to financial pressures, Spotify announced plans to lay off 600 employees in January 2023, followed by another round of cuts affecting 1,500 jobs, roughly 17% of its workforce, less than a year later.