Spotify has announced a successful quarter, achieving record profits just a year after the company raised the prices of its Premium plans for the first time. The Swedish audio streaming giant 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. The number of monthly active users also increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s performance, 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 noted that their progress has surpassed even their own expectations, indicating a positive outlook for the future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced an increase in subscription prices for its Premium users in the U.S. Starting this month, individual plan subscribers will see their fees rise by $1 to $12, those on Duo plans will pay an additional $2, and Family plan users will incur an extra $3, bringing their total to $20. This adjustment comes after the company raised membership costs by an average of $1 in July 2022, marking the first price hike in 13 years.
Despite these price increases, Spotify added seven million net subscribers in the recent quarter, exceeding its prior guidance by one million.
Spotify remains the leading audio streaming service worldwide, and a Bloomberg analysis found that its users are less likely to cancel their subscriptions compared to other audio and video streaming platforms. However, the company faced challenges in the past, with its stock plummeting by more than two-thirds in 2022 after experiencing several quarters of operating losses. Earlier this year, Spotify announced layoffs of 600 employees, followed by an additional cut of 1,500 jobs, representing about 17% of its workforce.