Spotify has announced another quarter of record profits following its first-ever price increase for Premium plans last year. The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also grew by 14% year-on-year, 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.” He highlighted that the company’s growth trajectory has surpassed their initial expectations, signaling a promising future.
Following the earnings announcement, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company revealed plans to increase prices for its Premium users in the U.S., effective this month. Individual plan users will see an increase of $1 to $12, Duo plan users will pay $2 more, bringing their total to $17, and Family plan users will face a $3 hike, making it $20. This marked the first price increase in 13 years for the Swedish company, which raised membership fees by an average of $1 last July.
Despite these price adjustments, Spotify managed to attract an additional seven million net subscribers in the quarter, exceeding the company’s previous guidance by one million. A Bloomberg analysis indicates that Spotify remains the most popular audio streaming service globally, with its subscribers being the least inclined to cancel their memberships compared to other streaming platforms.
However, Spotify’s journey hasn’t always been smooth. The company’s stock lost over two-thirds of its value in 2022 due to several quarters of operating losses. In early 2023, Spotify announced a workforce reduction of 600 employees, and less than a year later, it eliminated an additional 1,500 positions, accounting for about 17% of its workforce.