Spotify has announced another record profit quarter, marking a year since it first increased the prices of its Premium plans. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also grew by 14% annually, 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. We are doing so on a timeline that has exceeded even our own expectations, which 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 a price increase for its Premium users in the U.S. Starting this month, individual plan subscribers will see an increase of $1, bringing the cost to $12. Duo plan users will pay $2 more, totaling $17, while Family plan users will see a $3 hike, making it $20. This price adjustment comes after the company raised membership fees for the first time in 13 years last July by an average of $1.
Despite these increases, Spotify added seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service worldwide, Spotify experiences lower membership cancellation rates compared to other audio and video streaming platforms, according to a Bloomberg analysis. However, the company’s financial journey has had its challenges, with Spotify’s stock dropping more than two-thirds in value during 2022 amid several quarters of operating losses. In January 2023, Spotify announced the termination of 600 employees, followed by a further 1,500 job cuts—about 17% of its workforce—less than a year later.