Spotify has announced another record profit quarter, marking a year since it first raised the prices of its Premium plans. The Swedish audio streaming platform 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) in the same period last year. The company also witnessed a 14% annual increase in monthly active users, totaling 626 million.
CEO Daniel Ek expressed his 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 earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S., effective this month. Individual plan subscribers will now pay $12, reflecting a $1 increase, while Duo plan users will see their fees rise by $2 to $17, and Family plan users will pay $20, up by $3. This price increase came after the company raised membership costs for the first time in 13 years by an average of $1 in July 2022.
Despite these increases, Spotify gained seven million net subscribers during the quarter, exceeding its earlier projections by one million. A Bloomberg analysis noted that Spotify holds the title of the most popular audio streaming service globally, with users being the least likely to cancel their subscriptions compared to other audio or video streaming platforms.
However, Spotify’s financial trajectory hasn’t always been positive; in 2022, its stock lost over two-thirds of its value amid several quarters of operational losses. Earlier this year, the company announced plans to lay off 600 employees, followed by another reduction of 1,500 jobs, representing approximately 17% of its workforce, less than a year later.