Spotify has reported another quarter of record profits, marking a year since it raised the prices of its Premium plans for the first time. The Swedish audio streaming company announced an operating income of 266 million euros ($289 million) for the second quarter, a significant rebound from a loss of 247 million euros ($268 million) in the same period last year. Among the positive highlights, the service saw its monthly active users increase by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
In the wake of the impressive earnings report, Spotify’s stock surged nearly 14% in pre-market trading. Earlier in June, the company announced price increases for its Premium users in the U.S., effective this month. Individual plan subscribers will now pay $12 per month, a $1 hike; Duo plan users will see an increase to $17, up by $2; and Family plan prices will rise by $3, resulting in a new cost of $20. This price increase followed a broader adjustment made last July, which marked the first membership cost increase in 13 years.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous predictions by one million.
As the most popular audio streaming platform globally, Spotify users display a lower tendency to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis. However, the company’s financial health has not always been robust; it suffered a significant stock value drop of over two-thirds in 2022 and faced multiple quarters of operating losses. In early 2023, Spotify made headlines by laying off 600 employees, followed by a further reduction of 1,500 jobs, accounting for about 17% of its workforce.