Spotify has reported another record profit for the second quarter, one year after it increased the prices of its Premium plans for the first time. The Swedish audio streaming giant posted an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek shared his excitement about the company’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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium services in the U.S. Starting this month, individual plan users will see a one-dollar increase to $12, Duo plan users will pay two dollars more at $17, and Family plan users will face a three-dollar rise to $20. This move followed a similar membership cost increase in July 2022, marking the first rise in 13 years.
Despite the price hikes, Spotify successfully gained seven million net subscribers in the last quarter, exceeding its previous expectations by one million.
Currently, Spotify stands as the leading audio streaming service globally, with an analysis indicating that its users are less likely to cancel their subscriptions compared to those of other audio and video streaming platforms.
However, the company has faced financial challenges in the past; its stock value plummeted by over two-thirds in 2022, resulting in multiple quarters of operating losses. In early 2023, Spotify announced the layoff of 600 employees, and less than a year later, it cut 1,500 jobs, representing approximately 17% of its workforce.