Spotify has reported another quarter of record profits, following a price increase for its Premium plans last year. The Swedish audio streaming service’s operating income for the second quarter reached 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) during the same period in the previous year. Monthly active users also grew by 14% year-on-year, reaching 626 million.
“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,” commented CEO Daniel Ek. He expressed optimism about the company’s performance, indicating that it has exceeded expectations, which augurs well for the future.
As a result of the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S., effective this month. Individual plan users will now pay $12, an increase of $1, while Duo plans will cost $17, up by $2. Family plans now cost $20, a $3 increase. This was the first membership fee increase in 13 years, which took effect last July.
Despite these price adjustments, Spotify managed to add seven million net subscribers in the quarter, surpassing its earlier guidance by one million.
Spotify remains the leading audio streaming service globally, with users being the least likely to terminate their memberships, according to a Bloomberg analysis. However, the company has faced financial challenges, especially in 2022 when its stock plummeted by over two-thirds amid multiple quarters of operating losses. In early 2023, Spotify announced a plan to cut 600 jobs, and later, in a significant move, it reduced its workforce by 1,500 employees, or approximately 17% of its total staff.