Spotify has announced another quarter of record profits, achieving significant financial success one year after its first-ever price increase for Premium plans.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a dramatic turnaround from the 247 million euro ($268 million) loss recorded a year earlier. The company also saw a 14% year-over-year growth in monthly active users, reaching a total of 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not just a great product but also increasingly a successful business,” stated CEO Daniel Ek. He expressed optimism about the company’s progress exceeding even its own expectations, suggesting a bright future ahead.
Following the release of its earnings report, Spotify’s stock surged by nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users, effective this month. Individual plan subscribers will see their monthly cost rise by $1 to $12, Duo plan users will pay an additional $2, totaling $17, and Family plan users will be charged $3 more, bringing the total to $20. This increase came after the company raised membership fees for the first time in 13 years, by an average of $1, in July of the previous year.
Despite these price hikes, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the world’s leading audio streaming platform, Spotify is noted for having the lowest cancellation rate among audio and video streaming services, according to a Bloomberg analysis.
However, the company’s financial history has not always been positive. In 2022, Spotify’s stock plummeted by more than two-thirds as the company faced several quarters of operating losses. In January 2023, Spotify announced a workforce reduction of 600 employees, followed by a further cut of 1,500 jobs, representing about 17% of its total staff, less than a year later.