Spotify has announced another record profit quarter, marking a significant turnaround following the company’s first-ever price increase for its Premium plans last year. For the second quarter, the Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), a stark contrast to the loss of 247 million euros ($268 million) recorded during the same period last year. The service also saw a 14% annual increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s innovation and growth trajectory, 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.”
In response to the strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscriptions in the U.S. Starting this month, individual users will see their monthly fee rise by $1 to $12, while Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This move follows an average increase of $1 in membership costs announced in July 2022, the first price hike in 13 years.
Despite the price adjustments, Spotify successfully added seven million net subscribers last quarter, exceeding expectations by one million. According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with users showing the lowest likelihood of canceling their subscriptions compared to other major audio and video streaming platforms.
However, the company has faced financial struggles in the past, losing more than two-thirds of its stock value in 2022 due to several quarters of operating losses. In early 2023, Spotify announced a workforce reduction of 600 employees and later cut an additional 1,500 jobs, accounting for roughly 17% of its staff.