Spotify has announced another quarter of record profits, marking a significant turnaround since the company raised its Premium plan prices for the first time in history just a year ago.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter of 2023, a notable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users increased by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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, which bodes very well for the future.”
Following the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced it would increase prices for its Premium subscribers in the U.S. starting 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 see a $3 hike to $20. This marked the first price adjustment in 13 years, averaging an increase of $1.
Despite these price hikes, Spotify added seven million net subscribers in the last quarter, exceeding its previous guidance by one million.
A Bloomberg analysis revealed that Spotify remains the leading audio streaming service globally, with its users showing the lowest likelihood of canceling their subscriptions compared to other streaming giants.
However, the company’s financial journey has not been without challenges. In 2022, Spotify’s stock plummeted by over two-thirds amid several quarters of operating losses. In January 2023, the company laid off 600 employees, and less than a year later, it further reduced its workforce by 1,500 employees, amounting to approximately 17% of its total staff.