Spotify has reported another record profit quarter, a year after it raised the prices of its Premium plans for the first time. The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users also grew 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s continuous innovation and its growing reputation as a strong business. He remarked, “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 surged nearly 14% in pre-market trading.
Earlier in June, Spotify announced an increase in prices for its U.S. Premium subscribers. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more, bringing their total to $17, and Family plan users will see a $3 increase, reaching $20. The price adjustments followed a previous average increase of $1 in membership costs, the first in 13 years, which occurred last July.
Despite these price hikes, Spotify successfully added seven million net subscribers in the last quarter, exceeding its own guidance by one million.
As the leading audio streaming service globally, Spotify’s user base is reportedly the least likely to cancel subscriptions, according to a Bloomberg analysis. However, the financial landscape for Spotify has not always been positive. In 2022, the company’s stock fell by more than two-thirds due to multiple quarters of operating losses. In early 2023, Spotify announced layoffs, cutting 600 jobs, followed by another reduction of 1,500 jobs, or approximately 17% of its workforce, less than a year later.