Spotify has announced another record profit for the second quarter, following its first-ever price increase for Premium plans a year ago. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a significant increase from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users have also surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s performance, 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 price hikes for its Premium services in the U.S., effective this month. Individual plan users will see an increase of $1, bringing their monthly cost to $12, while Duo plan users will pay an additional $2 at $17, and Family plan members will face a $3 rise to $20. This marks the first price adjustment in 13 years, with an average increase of $1 implemented last July. Despite the higher prices, Spotify added seven million net subscribers during the quarter, surpassing its guidance by one million.
Spotify remains the leading audio streaming platform globally, with a Bloomberg analysis indicating that its users are the least likely to cancel their subscriptions compared to other major streaming services. Nonetheless, the company’s financial health has fluctuated; in 2022, Spotify’s stock value plummeted by more than two-thirds amid several quarters of operating losses. In early 2023, the company announced a workforce reduction of 600 employees, followed by another cut of 1,500 jobs, representing approximately 17% of its staff.