Spotify has announced record profits for another quarter, following its first-ever price increase for Premium plans last year. 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 number of monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s progress, 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 earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company announced a price increase for U.S. Premium users, with individual plans rising by $1 to $12, Duo plans increasing by $2 to $17, and Family plans going up by $3 to $20. This marked the first membership cost hike in 13 years, with an average increase of $1 last July.
In spite of these price rises, Spotify successfully added seven million net subscribers during the quarter, exceeding its own projections by one million. A Bloomberg analysis revealed that Spotify is the leading audio streaming platform globally, with users least likely to cancel their subscriptions compared to other audio or video streaming services.
However, Spotify’s financial path has not always been smooth. The company’s stock plummeted over two-thirds in 2022 as it experienced multiple quarters of operating losses. In response, Spotify announced layoffs of 600 employees in January 2023, followed by an additional 1,500 job cuts, representing about 17% of its workforce, less than a year later.