Spotify has announced another quarter of record profits, marking one year since it increased the price of its Premium plans for the first time ever. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) from the previous year. Furthermore, the number of monthly active users rose by 14% year-over-year to reach 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.” He added that the company’s timeline for achievements has exceeded even its own expectations, suggesting a positive outlook for the future.
Following the release of these better-than-expected earnings, Spotify’s stock surged almost 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for Premium users in the United States. Starting this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more at $17, and Family plan costs will rise by $3 to $20. This past July, Spotify raised its membership costs by an average of $1, marking the first price increase in 13 years.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous guidance by one million. The platform has been recognized as the most popular audio streaming service globally, with users showing a lower tendency to cancel their subscriptions compared to other audio and video streaming companies, according to a Bloomberg analysis.
However, it hasn’t always been smooth sailing for Spotify financially. The company’s stock value 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 an additional 1,500 jobs, representing approximately 17% of its total staff.