Spotify announced another record profit quarter, following its first-ever price increase for Premium plans a year ago.
The Swedish streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, bouncing back from a loss of 247 million euros ($268 million) last year. Additionally, the company saw a 14% annual increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed 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 release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its U.S. Premium users. Starting this month, individual plan users will pay an additional $1 (totaling $12), Duo plan users will see a $2 increase ($17), and Family plan users will incur a $3 rise ($20). This was the first membership cost increase in 13 years, averaging $1 last July.
Despite the price hikes, Spotify added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
A Bloomberg analysis revealed that Spotify is the leading audio streaming service globally, with its users being the least likely to cancel their memberships compared to other streaming platforms.
However, Spotify’s financial journey has faced challenges. The company’s stock plummeted by more than two-thirds in 2022 amid multiple quarters of operating losses. In January 2023, Spotify announced a job cut of 600 employees, followed by another reduction of 1,500 jobs, equating to about 17% of its workforce.