Spotify has announced another quarter of record profits a year after it first increased the prices of its Premium plans. The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) for the second quarter, in stark contrast to a loss of 247 million euros ($268 million) the previous year. The number of monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’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 promising earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S., which took effect this month. Individual plan users will now pay $12, up by $1, while Duo plans will now cost $17, a $2 increase, and Family plans will be priced at $20, an increase of $3. This marked the first price hike in 13 years, with an average increase of $1.
Despite these increases, Spotify added seven million net subscribers during the quarter, exceeding its previous forecast by one million. A Bloomberg analysis revealed that Spotify is the leading audio streaming service globally, with its users being less likely to cancel their memberships compared to those of other audio or video streaming platforms.
However, Spotify’s financial journey hasn’t always been smooth. The company’s stock plummeted by more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, Spotify announced the layoff of 600 employees, and less than a year later, it reduced its workforce by an additional 1,500 positions, accounting for approximately 17% of its staff.