Spotify has announced a record profit for another quarter, marking a year since the company raised prices for its Premium subscription plans for the first time.
In the second quarter, the Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million), a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. The company also saw a 14% increase in monthly active users, bringing the total to 626 million.
CEO Daniel Ek expressed enthusiasm for 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. This all bodes very well for the future.” Following the positive earnings announcement, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced that it would be increasing prices for Premium plans in the U.S. starting this month. Individual plan subscribers will see a $1 increase to $12, Duo plan users will face a $2 rise to $17, and Family plan customers will pay $3 more, totaling $20. This price adjustment marks the first increase in 13 years, which took place last July, when prices were raised by an average of $1.
Despite the price hikes, Spotify added seven million net subscribers in the latest quarter, exceeding its own targets by one million. A Bloomberg analysis revealed that Spotify remains the leading audio streaming service worldwide, with its subscribers showing the highest retention rate compared to other audio or video streaming platforms.
Nevertheless, the company has experienced financial challenges in the past. In 2022, Spotify’s stock lost over two-thirds of its value as it reported multiple quarters of operating losses, leading to layoffs of 600 employees in January 2023, followed by another reduction of 1,500 positions, accounting for about 17% of its workforce.