Spotify has announced another quarter of record profits, a year after it increased the price of its Premium plans for the first time. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) in the same quarter last year. Monthly active users grew 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 on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting 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 users will see a $3 increase to $20. This followed another average price hike of $1 last July, marking the first increase in membership costs in 13 years.
Despite these price adjustments, Spotify added seven million net subscribers during the quarter, surpassing its previous guidance by one million, solidifying its position as the most popular audio streaming service globally. A Bloomberg analysis noted that Spotify users are the least likely to cancel their memberships compared to other audio or video streaming giants.
However, the company’s financial performance has not always been robust. In 2022, Spotify’s stock lost more than two-thirds of its value amid several quarters of operating losses. Earlier this year, the company announced the layoff of 600 employees, followed by a further reduction of 1,500 jobs, representing roughly 17% of its workforce.