Spotify has reported its latest quarterly earnings, showcasing record profits just a year after the company increased the prices of its Premium subscription plans for the first time.
In the second quarter, the Swedish audio streaming platform declared an operating income of 266 million euros ($289 million), significantly improved from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the monthly active user count surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism, 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 saw a nearly 14% rise in pre-market trading.
Earlier this month, Spotify implemented a price increase for its U.S. Premium users. Individual plans now cost $12, an increase of $1, while Duo plans are priced at $17, up by $2, and Family plans are now $20, an increase of $3. This price hike came after the company raised subscription costs for the first time in 13 years last July.
Despite these increases, Spotify managed to gain seven million net new subscribers during this quarter, exceeding its previous subscriber growth guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly among the least likely to cancel their subscriptions, 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, driven by multiple quarters of operational losses. The company announced the layoff of 600 employees in January 2023, followed by a more significant reduction of 1,500 jobs, which represented approximately 17% of its workforce less than a year later.