Spotify has announced another record profit quarter just one year after implementing its first-ever price increase for Premium subscriptions.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users rose 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm, 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.
Earlier in June, Spotify announced a price increase for Premium subscriptions in the United States. Beginning this month, individual plan users will pay $1 more, bringing the total to $12 per month, while Duo plan subscribers will pay $2 more, totaling $17, and Family plan users will see a $3 increase to $20. This price adjustment follows an average increase of $1 in July 2022, the first hike in 13 years.
Despite the increased pricing, Spotify gained seven million net subscribers in the last quarter, surpassing its earlier predictions by one million.
As the leading audio streaming platform globally, Spotify users also have the lowest cancellation rates compared to other audio and video streaming services, according to Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. In 2022, the company’s stock plummeted by more than two-thirds due to multiple quarters of operational losses. In January 2023, Spotify announced the layoff of 600 employees, and within a year, it reduced its workforce by an additional 1,500 jobs, which accounts for approximately 17% of its total staff.