Spotify has announced yet another quarter of record profits, a year after it first increased the prices of its Premium subscription plans. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) in the second quarter, a significant contrast to a loss of 247 million euros (about $268 million) during the same period last year. The platform also saw a 14% year-on-year growth in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s current trajectory, 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 release of better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscribers in the U.S., which took effect this month. Individual plan users will now pay $12, up from $11; Duo plan users will see a hike to $17 from $15; and Family plan users will pay $20, an increase of $3. This was the first price adjustment in 13 years, raising membership costs by an average of $1.
Despite the price hikes, Spotify successfully added seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are less likely to cancel their memberships compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial history has not always been strong. In 2022, Spotify’s stock plummeted by more than two-thirds, following several quarters of operating losses. In January 2023, the company announced a reduction of 600 employees, and less than a year later, it cut an additional 1,500 jobs, amounting to roughly 17% of its workforce.