Spotify has reported another quarter of record profits, following its historic price increase for Premium plans a year ago. The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also saw a 14% annual growth, 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.”
Following the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium services in the U.S., starting this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more to reach $17, and Family plan users will incur an additional $3, totaling $20. These adjustments were the first membership cost increases in 13 years and came after an average hike of $1 last July.
Notably, Spotify managed to gain seven million net subscribers during the quarter, surpassing its guidance by one million.
As the world’s leading audio streaming platform, Spotify users show the lowest likelihood of canceling their memberships compared to other audio or video streaming services, according to a Bloomberg analysis.
However, the company’s financial history has not always been stable; stock value plummeted by more than two-thirds in 2022 amid several quarters of losses. In January 2023, Spotify announced a plan to eliminate 600 jobs, followed by a further reduction of about 1,500 jobs, representing roughly 17% of its workforce, less than a year later.