Spotify has announced another quarter of record profits, marking a significant turnaround from previous losses, following a price increase for its Premium plans last year. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) in the second quarter, compared to a loss of 247 million euros ($268 million) during the same period a year earlier. Monthly active users also saw a 14% increase year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s progress, 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 added that the company’s growth had surpassed even its own expectations, which bodes well for its future.
Following the optimistic earnings report, Spotify’s stock rose nearly 14% in pre-market trading. In June, the company announced it would be increasing prices for its Premium plans in the U.S. Effective this month, individual users will see a $1 increase to $12, while Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This price adjustment follows a previous increase in July 2022, which was the first in 13 years, averaging an extra dollar.
Despite the price hikes, Spotify gained seven million net subscribers in the quarter, exceeding its forecast by one million. A Bloomberg analysis indicated that Spotify remains the most popular audio streaming service globally and that its subscribers are among the least likely to cancel their memberships.
However, Spotify’s journey has not always been smooth, as the company’s stock plummeted by more than two-thirds in 2022, leading to multiple quarters of operational losses. In response to financial pressures, the company announced layoffs of 600 employees in January 2023, followed by an additional 1,500 job cuts—around 17% of its workforce—less than a year later.