Spotify has announced yet another quarter of record profits, achieving this milestone a year after implementing its first-ever price increase for Premium subscriptions.
The Swedish audio streaming platform 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) during the same period last year. Additionally, the number of monthly active users surged by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’s growth, 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 release of its more favorable earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for its Premium subscriptions in the U.S. Starting this month, individual plans will cost $12, an increase of $1; Duo plans will see a $2 increase to $17; and Family plans will rise by $3 to $20. This adjustment follows a previous membership cost increase in July 2022, which was the first in 13 years.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding its prior guidance by one million.
As the most popular audio streaming service globally, Spotify has also been noted for having the lowest cancellation rates among major audio and video streaming companies, according to a Bloomberg analysis.
However, the company’s financial situation has not always been positive. Spotify’s stock value plummeted by more than two-thirds in 2022, as it experienced multiple quarters of operating losses. In January 2023, the company announced a workforce reduction of 600 employees, followed by a second round of cuts impacting 1,500 employees, approximately 17% of its total staff.