Spotify has reported another quarter of record profits, marking one year since it increased the prices of its Premium plans for the first time. The Swedish audio streaming service posted an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. Additionally, the platform experienced a 14% annual growth in monthly active users, reaching 626 million.
Daniel Ek, CEO of Spotify, stated in a press release, “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. This all bodes very well for the future.”
Following this positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, the company announced an increase in Premium subscription prices for U.S. users. Starting this month, individual plan users are expected to pay $12, which is $1 more than before, while Duo plan subscribers will see their fees rise to $17, an increase of $2. Family plan costs will increase by $3 to $20. This change follows a price hike last July, the first in 13 years, averaging an additional dollar per subscription.
Despite these price increases, Spotify added seven million net subscribers during the quarter, exceeding its previous projections by one million.
According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with its users showing the least tendency to cancel their memberships compared to other audio or video streaming platforms.
However, Spotify has faced financial struggles in the past, with its stock losing over two-thirds of its value in 2022 due to multiple quarters of operating losses. In January 2023, the company announced the layoffs of 600 employees, and less than a year later, it cut 1,500 jobs, accounting for roughly 17% of its workforce.