Spotify has announced record profits for another quarter, a year after increasing the prices of its Premium subscription plans for the first time. The Swedish audio streaming giant reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant turnaround from a loss of 247 million euros (about $268 million) during the same period last year. The platform also reported a 14% growth in monthly active users, reaching a total of 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 surged almost 14% in pre-market trading on Tuesday.
In June, Spotify had announced a price hike for its Premium users in the U.S. Starting this month, individual plan users will see an increase of $1 to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will pay an additional $3, bringing their total to $20. This marked the first price increase in 13 years, with the average hike being $1.
Despite these increases, Spotify successfully gained seven million net subscribers during the quarter, surpassing its earlier guidance by one million.
Bloomberg’s analysis revealed that Spotify remains the most popular audio streaming service globally, with its users being the least likely to cancel their subscriptions among major audio and video streaming services. However, the company’s financial situation has not always been robust; Spotify’s stock plummeted by more than two-thirds in 2022 due to consecutive quarters of operating losses. Earlier this year, the company made the decision to lay off 600 employees and later cut an additional 1,500 jobs, representing roughly 17% of its workforce.