Spotify has announced another quarter of record profits, marking a significant milestone since it increased the prices of its Premium plans for the first time last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, recovering from a loss of 247 million euros ($268 million) during the same period the previous year. The number of monthly active users rose by 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed excitement about the company’s performance, noting, “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.” He added that the company’s growth trajectory has surpassed expectations, signaling optimistic prospects for the future.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday. In June, the company announced a price increase for its Premium users in the U.S. Effective this month, individual plan users will see their monthly fee rise by $1 to $12, Duo plan users will pay an additional $2 for a total of $17, and Family plan users will be charged $3 more, totaling $20. This change comes after the Swedish company raised membership costs for the first time in 13 years, by an average of $1, in July 2022.
Despite the price hikes, Spotify reported an addition of seven million net subscribers in the quarter, exceeding its prior guidance by one million. A Bloomberg analysis indicates that Spotify remains the leading audio streaming platform globally, with users being the least inclined to cancel their subscriptions compared to other streaming services.
However, the path to profitability has not always been smooth for Spotify. In 2022, the company’s stock lost over two-thirds of its value due to multiple quarters of operating losses. In January 2023, Spotify announced a reduction of 600 employees, followed by a significant layoff of 1,500 jobs, representing approximately 17% of its workforce, less than a year later.