Spotify has announced another record quarter of profits, marking a significant turnaround following its first-ever price increase for Premium plans one year ago. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. The company also saw its monthly active users climb 14% year-over-year to reach 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 highlighted that the growth trajectory has surpassed even their own expectations, suggesting a promising outlook 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 a price increase for its Premium subscription plans in the U.S. Beginning this month, users on individual plans will see a $1 increase to $12, duo plans will increase by $2 to $17, and family plans will go up by $3 to $20. This was the first membership cost hike in 13 years, with last July’s average increase set at $1. Notably, despite raising prices, Spotify added seven million net subscribers during the quarter, exceeding its own projections by one million.
As the leading audio streaming service globally, Spotify has been recognized for having the lowest membership cancellation rates among its competitors, according to a Bloomberg analysis. However, the company faced challenges in 2022, losing more than two-thirds of its stock value and undergoing multiple rounds of layoffs, including a reduction of 600 employees in January 2023, followed by an additional 1,500 job cuts later that year.