Spotify has announced another successful quarter, achieving record profits one year after its initial price increase for Premium plans. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) in the second quarter, contrasting with a loss of 247 million euros (around $268 million) from the same period last year. Additionally, the number of monthly active users surged by 14% year-over-year to reach 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. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for Premium users in the U.S. Starting this month, individual plan subscribers will see a $1 rise to $12, while Duo plan users will pay $2 more at $17. Family plan costs have also increased by $3, bringing the total to $20. This price adjustment marked the first increase in membership costs in 13 years, averaging an extra $1.
Despite these hikes, Spotify managed to gain seven million net subscribers in the last quarter, exceeding previous estimates by one million. The platform remains the leading audio streaming service globally, and according to a Bloomberg analysis, its users are the least likely among streaming services to cancel their subscriptions.
However, Spotify’s financial history has seen its challenges. The company’s stock dropped significantly in 2022, losing over two-thirds of its value due to several quarters of operating losses. In January 2023, Spotify announced the elimination of 600 positions, followed by a more substantial cut of 1,500 jobs, accounting for roughly 17% of its workforce, just less than a year later.