Spotify has reported record profits for another quarter, following its first-ever price increase for Premium plans last year. The Swedish audio streaming platform posted an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users rose by 14% to reach 626 million.
Daniel Ek, CEO of Spotify, expressed enthusiasm about 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
In response to the favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced that it would be increasing prices for Premium users in the U.S. starting this month. Individual plan users will see their monthly fee rise by $1 to $12, Duo plan subscribers will pay $2 more, bringing their total to $17, and Family plan costs will increase by $3, totaling $20. This marked the first price hike in 13 years, with an average increase of $1 last July. Despite these adjustments, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous forecast by one million.
As the world’s leading audio streaming service, Spotify’s users have displayed a lower tendency to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, Spotify has faced challenges in the past; its stock plummeted more than two-thirds in 2022 amid multiple quarters of operating losses. In January 2023, the company announced the layoff of 600 employees, followed by another workforce reduction of 1,500 jobs, roughly 17% of its staff, less than a year later.