Spotify has announced record profits for another quarter, a year after it increased the prices of its Premium subscriptions for the first time ever. The music streaming platform 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. The number of monthly active users rose by 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed optimism about the company’s performance, 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 announcement of its positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price hikes for its Premium offerings in the U.S. Starting this month, individual plan users will see an increase of $1, bringing the total to $12. Duo plan users will now pay $2 more, totaling $17, while Family plan members will face a $3 increase, reaching $20. This marks the first raise in membership costs in 13 years, with a prior average increase of $1 introduced last July.
Despite the price hikes, Spotify managed to gain an additional seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the world’s leading audio streaming service, Spotify users have been found to be the least likely among audio and video streaming services to cancel their subscriptions, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. The company’s stock plummeted by more than two-thirds in 2022, following multiple quarters of operating losses. In January 2023, Spotify announced a workforce reduction of 600 employees and less than a year later made another cut of 1,500 jobs, which represents about 17% of its total staff.