Spotify has announced another record profit quarter, marking a significant milestone one year after the company increased the prices of its Premium subscriptions for the first time.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, up from a loss of 247 million euros ($268 million) for the same period last year. The platform also saw a 14% increase in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed optimism in a statement, noting, “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 earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, the company announced that it would be increasing prices for its Premium subscribers in the United States. Beginning this month, individual plan users will pay $12, which is $1 more than previously, while Duo plan users will see a $2 increase to $17, and Family plan users will pay $20, an increase of $3. This price adjustment followed an average $1 increase in July 2022, marking the first membership fee hike in over a decade.
Despite the price rises, Spotify achieved a net gain of seven million subscribers in the quarter, exceeding its previous guidance by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, boasting the lowest cancellation rates among major audio and video streaming platforms.
However, the company’s financial journey has not always been smooth; in 2022, Spotify’s stock lost more than two-thirds of its value after facing a series of operating losses. In response to its challenges, the company announced layoffs, initially reducing its workforce by 600 employees in January 2023, and then cutting an additional 1,500 jobs, approximately 17% of its total staff, less than a year later.