Spotify has announced yet another quarter of record profits, coming a year after it implemented its first-ever price increase for Premium subscriptions.
In its second quarter report, the Swedish audio streaming service revealed an operating income of 266 million euros ($289 million), a significant recovery from a loss of 247 million euros ($268 million) during the same period last year. The company saw a 14% annual increase in monthly active users, bringing the total to 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.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium offerings in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more at $17, and Family plan fees will rise by $3 to $20. This marked the first membership cost increase in 13 years, with an average rise of $1 implemented in July 2022.
Despite these price hikes, Spotify experienced a net gain of seven million subscribers in the quarter, exceeding its previous forecasts by one million.
According to a Bloomberg analysis, Spotify ranks as the most popular audio streaming service globally, with its users displaying the highest retention rates among audio and video streaming platforms.
However, the company has faced significant financial challenges in the past. In 2022, Spotify’s stock value plummeted by more than two-thirds as it dealt with several quarters of operating losses. At the beginning of 2023, Spotify announced layoffs of 600 employees, and less than a year later, it reduced its workforce by another 1,500 jobs, approximately 17% of its total staff.