Spotify has announced another record profit quarter, marking significant growth one year after increasing the prices of its Premium plans for the first time ever.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a notable recovery from the loss of 247 million euros ($268 million) reported in the same period last year. Monthly active users surged by 14% year-on-year, reaching 626 million.
In a statement, CEO Daniel Ek expressed enthusiasm, 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, which bodes very well for the future.”
Following the announcement, Spotify’s stock saw an increase of nearly 14% in pre-market trading, buoyed by the positive earnings report.
In June, Spotify revealed it would raise prices for Premium users in the U.S. Starting this month, users on individual plans will see an increase of $1 to $12, while Duo plans will rise by $2 to $17 and Family plans will increase by $3 to $20. This marked the first price increase in 13 years, averaging an increase of $1 last July.
Despite these hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding its own projections by one million.
As the leading audio streaming platform globally, Spotify users exhibit the lowest cancellation rates among all major audio and video streaming services, according to a Bloomberg analysis.
However, the company’s financial journey has not always been stable. In 2022, Spotify’s stock value plummeted by more than two-thirds amidst multiple quarters of operating losses. In January 2023, it announced a reduction of 600 jobs, followed by a further cut of 1,500 positions, amounting to approximately 17% of its workforce.