Spotify has announced another quarter of record profits, just a year after it initially raised the price of its Premium plans. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from the loss of 247 million euros ($268 million) recorded in the same period last year. The platform also saw a 14% annual increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm over 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.”
Following the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading. In June, the company announced price increases for its Premium services in the U.S., with individual plans now costing $12 (an increase of $1), Duo plans rising by $2 to $17, and Family plans going up by $3 to $20. This marked the first price hike in 13 years for the company.
Despite these increases, Spotify managed to gain seven million net subscribers during the quarter, exceeding its previous guidance by one million. A Bloomberg analysis showed that Spotify remains the world’s most popular audio streaming service, with its users being the least likely to cancel their memberships compared to other streaming platforms.
However, the company has faced challenges in the past, including a significant loss in stock value in 2022, when it experienced multiple quarters of operating losses. In early 2023, Spotify announced layoffs of 600 employees, followed by a further reduction of 1,500 jobs, amounting to approximately 17% of its workforce.