Spotify has announced another quarter of record profits, marking a year since it first increased the prices of its Premium plans. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a significant recovery from a loss of 247 million euros ($268 million) in the same period last year. The company also saw a 14% year-over-year increase in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s 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. This all bodes very well for the future.”
Following the release of its positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S., which took effect this month. Individual plan users will now pay $12, an increase of $1; Duo plan users will pay $17, up by $2; and Family plan users will see a $3 increase to $20. This marked the first price adjustment in 13 years, when the Swedish company raised its membership fees by an average of $1.
Despite these increases, Spotify managed to add seven million net subscribers during the quarter, surpassing its own expectations by one million.
A Bloomberg analysis has indicated that Spotify remains the leading audio streaming service worldwide, with its users exhibiting the lowest likelihood of cancelling their subscriptions compared to other audio or video streaming platforms.
However, the company’s financial journey has not always been straightforward. In 2022, Spotify’s stock plummeted by more than two-thirds following several quarters of operating losses. In January 2023, the company announced layoffs of 600 employees, and by the end of the year, it had eliminated 1,500 jobs, which accounted for roughly 17% of its workforce.