Spotify has announced a record quarter for profits, marking a significant milestone one year after the company increased the prices of its Premium plans for the first time in its history.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek shared his enthusiasm, 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, the company announced price hikes for its Premium subscribers in the U.S. Beginning this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more, bringing their total to $17, and Family plan subscribers will see a $3 hike to $20. This followed a similar increase in July 2022, the first price change in 13 years.
Despite these increases, Spotify successfully added seven million net subscribers in the quarter, exceeding its previous projections by one million.
Spotify remains the leading audio streaming platform globally, and according to a Bloomberg analysis, its users have the lowest cancellation rates compared to other audio and video streaming services. However, the company faced challenges in the past, with its stock plummeting over 66% in 2022 due to multiple quarters of operating losses. Early in 2023, Spotify announced a reduction of 600 jobs and later eliminated another 1,500 positions, which represents approximately 17% of its workforce.