Spotify has announced another record profit quarter, marking a year since it first raised its Premium plan prices. The Swedish audio streaming company 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) the previous year. Monthly active users also increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for 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.”
After the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company announced price hikes for its Premium subscriptions in the U.S., effective this month. Individual plans will increase by $1 to $12, Duo plans will rise by $2 to $17, and Family plans will cost $3 more, bringing them to $20. This move follows a previous price increase averaged at $1 last July, the first in 13 years.
Despite the raised prices, Spotify added seven million net subscribers during the quarter, surpassing its guidance by one million. According to a Bloomberg analysis, Spotify remains the world’s leading audio streaming service, with users less likely to cancel their memberships compared to other streaming platforms.
However, the company has faced financial challenges in the past, with its stock losing over two-thirds of its value in 2022 due to multiple quarters of operating losses. In early 2023, Spotify made the difficult decision to reduce its workforce by 600 employees and later laid off another 1,500 employees, amounting to roughly 17% of its staff.