Spotify has announced another quarter of record profits, marking a year since it first raised the prices of its Premium subscription plans. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the company saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s growth, 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 optimistic earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced price increases for its Premium users in the U.S., effective this month. Individual plan subscribers will see an increase of $1, bringing the total to $12, while Duo plans will rise by $2 to $17, and Family plans will now cost $20, up by $3. This marked the first increase in membership costs in 13 years, with an average rise of $1 last July.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its prior guidance by one million.
Spotify remains the world’s leading audio streaming service, with analysis indicating that its users are less likely to cancel subscriptions compared to those of other streaming platforms. However, the company’s financial journey has not always been positive. In 2022, Spotify’s stock plummeted by more than two-thirds, leading to several quarters of operating losses. The company announced cuts of 600 positions in January 2023, followed by a more extensive reduction of 1,500 jobs, approximately 17% of its workforce, less than a year later.