Spotify has announced another quarter of record profits, marking a year since the company first increased the prices of its Premium subscription plans.
The Swedish music streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. Additionally, the number of monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, highlighting that Spotify is not only a great product but is demonstrating strong business performance. Ek noted that Spotify’s growth has surpassed their own expectations, anticipating positive prospects for the future.
Following the release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, the company announced upcoming price increases for Premium users in the U.S. Starting this month, individual plan subscribers will see a $1 increase to $12, Duo plan users will pay $2 more, totaling $17, and Family plan subscribers will face a $3 increase, bringing their total to $20. This adjustment follows the first price hike in 13 years, which occurred in July 2022, where membership costs rose by an average of $1.
Despite these price hikes, Spotify managed to gain seven million net subscribers during the latest quarter, exceeding its prior guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly less likely to cancel their subscriptions compared to users of other streaming giants, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. The company’s stock saw a decline of over two-thirds in 2022 due to several quarters of operational losses. Earlier in 2023, Spotify announced layoffs affecting 600 employees, followed by further reductions that eliminated 1,500 jobs, accounting for approximately 17% of its workforce.