Spotify has reported another quarter of record profits, marking a significant improvement since it raised the price of its Premium plans for the first time last year. The Swedish audio streaming company posted an operating income of 266 million euros ($289 million) in the second quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. Additionally, Spotify witnessed a 14% annual growth in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed enthusiasm 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
After the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced price increases for its Premium users in the United States. Beginning this month, individual plan subscribers will see an increase of $1, bringing the total to $12. Duo plan users will pay $2 more, now at $17, while Family plan subscribers will face a $3 increase to $20. This price adjustment followed a membership cost hike in July 2022, which was the first increase in 13 years, averaging $1.
Despite the price raises, Spotify added seven million net subscribers during the quarter, surpassing its own predictions by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with users exhibiting the lowest likelihood of canceling their memberships compared to other audio or video streaming platforms. However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock plummeted by over two-thirds due to several quarters of operating losses. In January 2023, the company announced it would be laying off 600 employees, followed by a significant reduction of approximately 1,500 jobs, equating to about 17% of its workforce, less than a year later.