Spotify has announced another record-breaking quarter, achieving significant profitability just a year after raising the prices of its Premium plans for the first time.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, contrasting with a loss of 247 million euros ($268 million) during the same period last year. Additionally, the platform saw its monthly active users increase by 14% year-over-year, reaching 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. This all bodes very well for the future.” Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium services in the U.S. Beginning this month, individual plan users will pay an additional $1, bringing their total to $12. Duo plan users will see a $2 increase to $17, while Family plan users will pay $3 more, totaling $20. This marks the first price increase in 13 years, which occurred last July when memberships rose by an average of $1.
Despite these price hikes, Spotify added seven million net subscribers in the quarter, exceeding its prior guidance by one million. The platform remains the leading audio streamer globally, and a Bloomberg analysis indicated that its users have a lower likelihood of canceling subscriptions compared to other streaming services.
However, Spotify’s journey hasn’t been without challenges. The company’s stock plummeted by more than two-thirds in 2022 due to multiple quarters of operating losses. In January 2023, Spotify announced plans to reduce its workforce by 600 employees, and less than a year later, it cut another 1,500 jobs, representing approximately 17% of its total staff.