Spotify has announced another quarter of record profits, following its first-ever price increase for Premium plans last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) in the same period last year. The company also saw a 14% annual growth in monthly active users, 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. This all bodes very well for the future.”
Following its strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium services in the U.S. Starting in October, individual plans will see a $1 increase to $12, Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This price hike came a year after the company adjusted membership costs for the first time in 13 years.
Despite these increases, Spotify successfully gained seven million net subscribers in the recent quarter, surpassing its earlier guidance by one million. A Bloomberg analysis highlighted that Spotify remains the most popular audio streaming platform globally, with its users showing a lower likelihood of canceling subscriptions compared to competitors in the audio and video streaming space.
However, Spotify’s financial journey has not been without challenges. The company’s stock value fell more than two-thirds in 2022 due to a series of operating losses. In January 2023, Spotify announced a reduction of 600 positions and later cut 1,500 jobs, representing about 17% of its workforce.