Spotify has announced another quarter of record profits, achieving this milestone just one year after increasing the price of its Premium subscription plans for the first time in its history.
The Swedish audio streaming giant reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant contrast to a loss of 247 million euros ($268 million) from the previous year. Monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’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 announcement, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify had announced a price increase for its Premium users in the U.S. Beginning this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will face a $3 increase to $20. This adjustment came after the company raised prices for the first time in 13 years by an average of $1 in July of the previous year.
Despite these increases, Spotify successfully added seven million net subscribers during the quarter, exceeding its earlier guidance by one million.
Recognized as the leading audio streaming platform globally, Spotify users demonstrate a lower likelihood of canceling their memberships compared to other audio or video streaming services, according to a Bloomberg analysis.
However, the company has faced significant challenges. In 2022, Spotify’s stock plummeted by more than two-thirds as it dealt with multiple quarters of operating losses. In early 2023, the company announced plans to reduce its workforce by 600 employees, and less than a year later, it cut an additional 1,500 jobs, amounting to around 17% of its total staff.