Spotify has announced another quarter of record profits, marking a year since it first raised prices on its Premium plans. The Swedish streaming company reported an operating income of 266 million euros ($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 increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s growth and innovation, 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. This all bodes very well for the future.”
Following the release of its better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced price increases for its Premium subscribers in the U.S. Starting this month, individual plan users will see their monthly fee rise by $1 to $12, while Duo plan users will pay $2 more at $17, and Family plan subscribers will incur an additional $3, bringing their total to $20. This price hike follows an average increase of $1 implemented last July, marking the first membership cost adjustment in 13 years.
Despite these increases, Spotify managed to add seven million net subscribers during the quarter, exceeding its prior guidance by one million.
As the leading audio streaming service globally, Spotify has the lowest cancellation rates among major streaming platforms, according to a Bloomberg analysis.
However, the company’s financial path has not always been smooth. In 2022, Spotify’s stock plunged by more than two-thirds as it faced multiple quarters of operating losses. This prompted the company to announce layoffs of 600 employees in January 2023, followed by a further reduction of 1,500 jobs, representing approximately 17% of its workforce, less than a year later.