Spotify has reported another quarter of record profits, marking a significant recovery one year after implementing its first-ever price increase for Premium plans.
In its second quarter, the Swedish audio streaming service posted an operating income of 266 million euros ($289 million), a notable improvement from a loss of 247 million euros ($268 million) during the same period last year. The company saw its monthly active users rise by 14% year-over-year to reach 626 million.
“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,” CEO Daniel Ek stated. He added that the company’s progress has exceeded even its own expectations, which bodes well for the future.
Following the impressive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium service in the U.S., effective this month. Individual plan users will see an increase of $1 to $12, while Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This follows a prior increase in July 2022, which marked the first rise in membership costs in 13 years.
Despite these price hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely among all audio or video streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. In 2022, the company’s stock plummeted by over two-thirds, attributed to several quarters of operating losses. Earlier in 2023, Spotify announced layoffs affecting 600 employees, and later, it reduced its workforce by an additional 1,500 jobs, which accounts for approximately 17% of its total staff.