Spotify has reported another record profit quarter, a year after it implemented its first price increase on Premium plans. The Swedish audio streaming service announced an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) recorded in the same period last year. Monthly active users surged by 14%, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’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 earnings announcement, Spotify’s stock rose nearly 14% in pre-market trading.
In June, Spotify revealed that it would increase prices for its Premium subscriptions in the U.S. Starting this month, individual plan users will see a $1 hike to $12, Duo plan subscribers will pay $2 more for a total of $17, and Family plan users will incur a $3 increase, now costing $20. This price adjustment followed an average increase of $1 last July, which was the company’s first membership price hike in 13 years.
Despite the price increases, Spotify successfully added seven million net subscribers during the quarter, exceeding its own forecasts by one million. A Bloomberg analysis highlighted that Spotify stands as the foremost audio streaming platform globally, with users being less likely to cancel their memberships compared to other audio or video streaming services.
However, Spotify’s financial journey has not always been smooth. The company’s stock value dropped by more than two-thirds in 2022 amid multiple quarters of operational losses. Earlier this year, Spotify announced job cuts affecting 600 employees, and by January 2023, it had reduced its workforce by an additional 1,500 positions, accounting for roughly 17% of its total staff.