Spotify has announced another quarter of record profits, following its first-ever price increase for Premium plans last year. The Swedish audio streaming company 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 a year prior. There was also a 14% increase in monthly active users, which now stands at 626 million.
CEO Daniel Ek expressed enthusiasm for the company’s innovation and business 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. This all bodes very well for the future.” Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced price hikes for its Premium subscriptions in the U.S., effective this month. Individual plan users will now pay $12, an increase of $1, while Duo plan rates will rise by $2 to $17, and Family plans will increase by $3 to $20. These adjustments come after the first membership cost increase in 13 years, which occurred last July.
Despite the price increases, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous projections by one million. A Bloomberg analysis indicated that Spotify remains the leading audio streaming service globally, with its users being the least likely among streaming platforms to cancel their subscriptions.
However, Spotify’s financial history is not without challenges. The company’s stock value plummeted by more than two-thirds in 2022 due to multiple quarters of operating losses. Earlier this year, Spotify decided to reduce its workforce by 600 employees and later laid off an additional 1,500 staff members, amounting to about 17% of its total workforce.