Spotify has announced another quarter of record profits, following its first-ever price increase for Premium plans last year. 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) in the same quarter last year. The number of monthly active users surged by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed his excitement about the company’s progress, noting that Spotify continues to innovate and establish itself as a strong business as well as a product. The company’s stock saw a rise of nearly 14% in pre-market trading after the announcement of its better-than-expected earnings.
In June, Spotify disclosed plans to increase prices for its Premium services in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more, totaling $17, and Family plan users will incur a $3 increase, bringing their cost to $20. This marks the first price adjustment in 13 years, with an average rise of $1 last July.
Despite the hikes, Spotify successfully added seven million net subscribers in the quarter, surpassing its previous guidance by one million. According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with users showing the lowest likelihood of canceling their memberships compared to other audio or video streaming platforms.
The company’s financial history, however, has not been without challenges. Spotify’s stock plummeted by over two-thirds in 2022, amid significant operating losses over several quarters. In January 2023, the company announced a workforce reduction of 600 employees, followed by the elimination of 1,500 jobs, accounting for about 17% of its workforce less than a year later.