Spotify has reported yet another quarter of record profits, following its first price increase for Premium plans last year.
The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) for the second quarter, an improvement from a loss of 247 million euros ($268 million) during the same period a year earlier. The company also saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about these results, 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.” In response to the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
Earlier this month, Spotify announced new pricing for its Premium users in the U.S. Users on individual plans will now pay an additional $1, bringing the total to $12. Duo plans (for two users) will increase by $2 to $17, while Family plans will rise by $3 to $20. The previous price hike occurred in July 2022, marking the first increase in 13 years, averaging $1.
Despite the price adjustments, Spotify successfully added seven million net subscribers in the last quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are also reportedly the least likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the road has not always been smooth for Spotify, as the company faced significant challenges last year. During 2022, its stock plummeted by more than two-thirds in value due to several quarters of operating losses. In January 2023, Spotify announced a workforce reduction of 600 employees, and less than a year later, it let go of 1,500 staff, representing about 17% of its workforce.