Spotify has announced another record-breaking quarter, marking a significant turnaround following the first-ever price increase of its Premium plans a year ago.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) in the second quarter, a substantial improvement from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed his optimism, 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 climbed nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S., which took effect this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan subscriptions will rise by $3 to $20. This price adjustment followed an average $1 increase in membership costs last July, the first in 13 years.
Despite these increases, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous forecast by one million.
As the leading audio streaming service globally, Spotify’s users exhibit the lowest cancellation rates compared to other audio and video streaming platforms, according to a Bloomberg analysis. However, the company’s financial history has seen its share value drop by more than two-thirds in 2022, driven by multiple quarters of operating losses. To address its fiscal challenges, Spotify announced plans to reduce its workforce, laying off 600 employees in January 2023, followed by another reduction of 1,500 jobs, representing about 17% of its workforce, less than a year later.