Spotify has announced another quarter of record profits, marking a year since it increased the prices of its Premium subscription plans for the first time.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also rose 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 noted that their growth trajectory has surpassed their expectations and is promising for the future.
Following the release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S., which took effect this month. Individual plan subscribers will now pay $12, an increase of $1; Duo plan users will see a $2 jump to $17; and Family plan users will pay $20, which is a $3 increase. This marked the first membership price hike in 13 years, with an average increase of $1 initiated in July 2022.
Despite the price hikes, Spotify successfully added seven million net subscribers in the latest quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis revealing that its users are the least likely to cancel their memberships compared to other audio or video streaming platforms. However, the company’s financial journey has had its challenges; Spotify’s stock plummeted by more than two-thirds in 2022 due to prolonged operating losses. Earlier this year, the company announced layoffs affecting 600 employees, followed by the dismissal of an additional 1,500 staff members, which constituted approximately 17% of its workforce.