Spotify has announced record profits for another quarter, following the first-ever price increase for its Premium plans last year. The Swedish audio streaming service reported 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) during the same period last year. The platform’s monthly active users also surged, increasing by 14% year-over-year to reach 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. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock saw nearly a 14% increase in pre-market trading on Tuesday.
In June, Spotify announced new price hikes for its Premium users in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan customers will pay $2 more for a total of $17, and Family plan users will experience a $3 increase to $20. These adjustments follow last July’s price increase, which was the first in 13 years, averaging an additional dollar.
Despite the price hikes, Spotify added seven million net subscribers in the latest quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally and has been identified as having the lowest cancellation rates among major streaming platforms, according to a Bloomberg analysis. However, the company has faced financial challenges in the past, with its stock losing more than two-thirds of its value in 2022 due to several quarters of operating losses. In January 2023, Spotify announced job cuts of 600 employees, and less than a year later, it reduced its workforce by an additional 1,500 jobs, roughly 17% of its staff.