Spotify has reported a record profit for another quarter, just one year after increasing the prices of its Premium subscription plans for the first time in its history. The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to the loss of 247 million euros ($268 million) it incurred a year earlier. Additionally, the number of monthly active users rose by 14% year-over-year, reaching 626 million.
“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,” commented CEO Daniel Ek. He added, “We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the release of its strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium services in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more to reach $17, and Family plan users will see their costs rise by $3 to $20. This change came after the company raised membership costs by an average of $1 for the first time in 13 years in July.
Despite these price hikes, Spotify added seven million net subscribers in the last quarter, exceeding its previous estimates by one million.
As the leading audio streaming service globally, Spotify’s users are reportedly the least likely among major audio or video streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. The company’s stock value plummeted by more than two-thirds in 2022 due to a series of operational losses. In January 2023, Spotify made the decision to lay off 600 employees, and within a year, it expanded this cut to 1,500 jobs, equating to roughly 17% of its workforce.