Spotify has reported record profits for another quarter, following its decision to raise the prices of its Premium plans for the first time last year. In its second quarter, the Swedish audio streaming platform announced an operating income of 266 million euros ($289 million), a significant turnaround from the loss of 247 million euros ($268 million) recorded the same period a year prior. The company also saw a 14% annual increase in monthly active users, reaching 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.” He noted that their progress has exceeded their own expectations and is promising for the future.
Following the release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S. Starting this month, individual plan subscribers will pay $12 instead of $11, Duo plans will rise to $17 from $15, and Family plans will cost $20 instead of $17. This pricing adjustment comes after an average increase of $1 in membership costs last July, the first increase in 13 years.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its prior expectations by one million.
As the world’s leading audio streaming service, Spotify has also been noted for having the lowest cancellation rates among major audio and video streaming platforms, according to a Bloomberg analysis.
However, the company has faced significant financial challenges in the past. Spotify’s stock lost over two-thirds of its value in 2022 amid several quarters of operating losses. In January 2023, the company announced the layoff of 600 employees, and less than a year later, it cut 1,500 jobs, amounting to about 17% of its workforce.