Spotify revealed another record profit quarter, achieving this feat a year after its first-ever increase in the price of Premium plans. The Swedish audio streaming service 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 company also saw a 14% year-over-year increase in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate, demonstrating that we are not just a fantastic product but also an increasingly strong business,” stated CEO Daniel Ek. “Our progress has surpassed even our expectations, which is promising for our 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 Premium users in the U.S. Starting this month, individual plan users will pay $1 more (totaling $12), Duo plan subscribers will see a $2 increase ($17), and Family plan users will face a $3 increase ($20). Previously, the company raised prices for the first time in 13 years, averaging an increase of $1.
Despite these hikes, Spotify gained seven million net subscribers in the quarter, exceeding its prior guidance by one million.
Recognized as the leading audio streaming service globally, a Bloomberg analysis indicates that Spotify users have the lowest likelihood of canceling their subscriptions compared to other streaming platforms.
However, the company has faced significant financial challenges in the past. Spotify’s stock dropped over two-thirds of its value in 2022 due to ongoing operating losses, prompting the company to announce layoffs of 600 employees in January 2023 and an additional reduction of 1,500 jobs, about 17% of its workforce, within a year.