Spotify has announced another record profit quarter, marking a year since it first raised the prices of its Premium plans. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a substantial improvement from a loss of 247 million euros ($268 million) during the same period last year. Additionally, Spotify saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s direction, 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 nearly 14% in pre-market trading on Tuesday. In June, the company announced a price hike for its Premium services in the U.S., with individual plans increasing by $1 to $12, Duo plans rising by $2 to $17, and Family plans going up by $3 to $20. This increase followed a similar adjustment in July of the previous year, marking the first price change in 13 years.
Despite these price hikes, Spotify managed to add seven million net subscribers in the last quarter, exceeding its prior expectations by one million. According to a Bloomberg analysis, Spotify remains the most popular audio streaming service worldwide, with users less inclined to cancel their subscriptions compared to other streaming platforms.
However, Spotify’s financial journey has faced significant challenges. The company’s stock value plummeted over two-thirds in 2022 due to a series of operational losses. In early 2023, Spotify announced the layoffs of 600 employees, and less than a year later, it cut an additional 1,500 jobs, accounting for approximately 17% of its workforce.