Spotify has announced yet another quarter of record profits, marking one year since it first raised the prices of its Premium plans. The Swedish audio streaming giant reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’s trajectory, 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 jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S. Beginning this month, individual plan subscribers will see an increase of $1, raising the monthly fee to $12. Duo plans will increase by $2 to $17, while Family plans will see a $3 increase, bringing them to $20. This adjustment came after Spotify raised membership prices for the first time in 13 years by an average of $1 in July 2022.
Despite these price hikes, Spotify successfully added seven million net subscribers in the latest quarter, exceeding its prior forecast by one million.
As the leading audio streaming platform worldwide, Spotify users have demonstrated a lower likelihood of canceling their subscriptions compared to users of other audio and video streaming services, according to a Bloomberg analysis.
However, Spotify’s financial history has not always been robust. The company’s stock took a hit in 2022, losing more than two-thirds of its value due to consecutive quarters of operating losses. In January 2023, Spotify announced a reduction of 600 employees, followed by a larger cut of 1,500 jobs, about 17% of its workforce, less than a year later.