Spotify has announced a remarkable quarter of record profits following its first-ever price increase on Premium plans one year ago. 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) during the same period last year. The platform also experienced a 14% year-over-year growth in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the release of its positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, the company announced price increases for its Premium users in the U.S., starting this month. Individual plans will rise by $1 to $12, Duo plans will increase by $2 to $17, and Family plans will see a $3 hike to $20. This followed a broader membership price hike in July 2022, the first increase in 13 years, which averaged $1.
Despite these price adjustments, Spotify reported a net addition of seven million subscribers in the quarter, which exceeded its previous projections by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating its users are less likely to cancel their memberships compared to those of other major audio and video streaming platforms. However, the company has faced challenges in the past; in 2022, Spotify’s stock lost more than two-thirds of its value amid several quarters of operational losses. In response, the company announced layoffs of 600 employees in January 2023, followed by an additional reduction of 1,500 jobs, about 17% of its workforce, less than a year later.