Spotify has announced another quarter of record profits, marking a significant turnaround after raising the prices of its Premium plans for the first time last year. The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) in the same period the previous year. Additionally, Spotify’s monthly active users increased by 14% annually, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s progress, 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. 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, Spotify announced a price increase for its Premium users in the United States. Effective this month, individual plan users will pay an extra $1 (for a total of $12), Duo plan users will see an increase of $2 (to $17), and Family plan users will pay $3 more (totaling $20). This follows an average price increase of $1 for membership costs in July 2022, the first hike in 13 years.
Despite these price increases, Spotify added seven million net subscribers in the quarter, exceeding its previous guidance by one million. A Bloomberg analysis highlighted Spotify’s position as the leading audio streaming service, noting that its users are less likely to cancel their subscriptions compared to those of other audio or video streaming platforms.
However, Spotify’s financial history has not always been positive. The company’s stock plummeted by more than two-thirds in 2022 due to multiple quarters of operating losses. In January 2023, Spotify announced plans to lay off 600 employees, and less than a year later, it cut an additional 1,500 jobs, accounting for about 17% of its workforce.