Spotify has reported another record-breaking quarter of profits, one year after its first-ever price increase for Premium plans. The Swedish audio streaming platform announced 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 increased by 14% year-over-year to reach 626 million.
In a statement, 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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its U.S. Premium users. From this month, individual plan subscribers will see an increase of $1, bringing their monthly fee to $12. Duo plans will rise by $2 to $17, while Family plans will increase by $3, totaling $20. This was the first membership price increase in 13 years, with an average rise of $1 implemented last July.
Despite the increased costs, Spotify managed to add seven million net subscribers in the last quarter, surpassing its earlier projections by one million.
As the world’s leading audio streaming service, Spotify has proven to retain its subscribers better than any other audio or video streaming platforms, as per a Bloomberg analysis.
However, the company’s financial journey has had its challenges, as Spotify’s stock value plummeted by more than two-thirds in 2022, amid several quarters reporting operating losses. In response, the company laid off 600 employees in January 2023 and later cut an additional 1,500 jobs, amounting to around 17% of its workforce.