Spotify has announced another record profit quarter, marking a significant milestone a year after it increased the price of its Premium plans for the first time. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also showed a strong growth of 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, stating that Spotify is not just an excellent product but is also demonstrating strong business performance, surpassing its own expectations for growth. Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium plans in the U.S., which took effect this month. Individual plan users will now pay $1 more, totaling $12, while Duo plan users will see an increase of $2 to $17, and Family plan users will pay $3 more, bringing their total to $20. This was the first membership cost adjustment in 13 years, with an average increase of $1 announced last July.
Despite the price hikes, Spotify successfully added seven million net subscribers in the last quarter, outperforming its previous guidance by one million.
A Bloomberg analysis has highlighted that Spotify remains the leading audio streaming service globally, with its users showing the lowest likelihood of canceling their subscriptions compared to other major audio or video streaming platforms.
However, Spotify’s financial history has faced challenges, as its stock value plummeted by more than two-thirds in 2022 due to consecutive quarters of operating losses. Earlier this year, the company announced workforce cuts of 600 employees, followed by a larger layoff of 1,500 jobs, accounting for approximately 17% of its total staff.