Spotify has reported a record profit for another quarter, following a price increase for its Premium plans last year. The Swedish audio streaming company announced an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant turnaround from a loss of 247 million euros (around $268 million) during the same period last year. Monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed confidence in the company’s performance, 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 price hikes for its Premium plans in the U.S., effective this month. Individual plan users will see an increase of $1, bringing the total to $12, while Duo plan subscribers will face a $2 rise to $17, and Family plan users will pay $3 more, totaling $20. This was the first membership fee increase in 13 years, with an average rise of $1 implemented in July of last year.
Despite the increased costs, Spotify successfully added seven million net subscribers in the latest quarter, exceeding its prior forecast by one million.
Spotify remains the leading audio streaming service globally, with users exhibiting the lowest likelihood of canceling memberships compared to other audio or video streaming platforms, according to a Bloomberg analysis.
The company’s financial journey hasn’t always been optimistic, as Spotify’s stock plummeted over two-thirds in value in 2022, with the company reporting multiple quarters of operating losses. In January 2023, Spotify announced it would cut 600 employees, followed by a further reduction of 1,500 jobs, representing approximately 17% of its workforce less than a year later.