Yahoo Finance Spotify stock rises after company unveils latest US price hikes in profitability push
Spotify (SPOT) stock rose 5.6% on Monday after the streaming giant announced another round of price hikes for its US subscription plans.
Prices will rise between $1 and $3 beginning in July, the company said Monday.
Family plans will see the largest increase, with prices rising to $19.99 per month from $16.99. Duo plans, which allow two users to share an account, will increase by $2 to $16.99. And Spotify Premium subscriptions will now cost $11.99 a month, an increase of $1 a month.
Spotify boosted the cost of certain subscription plans last summer. The company previously hinted at plans to raise prices after last year's various price hikes "had minimal impacts on growth."
"So that we can continue to invest in and innovate on our product features and bring users the best experience, we occasionally update our prices," the company said in a blog post announcing the hikes.
The news comes after Spotify turned a profit in the first quarter and beat on most of its key metrics. It also guided to higher revenue and operating income for the current quarter.
Over the past year, Spotify has committed to price increases in addition to multiple rounds of layoffs and other initiatives to improve profitability. The company said it would be more intentional about future investments after spending billions on its push into the crowded podcast market.
During the company's first-quarter earnings call in April, Spotify CEO Daniel Ek confirmed plans to offer various subscription tiers to attract as many users as possible.
"We want to offer as much flexibility as possible in this next stage of Spotify because we are at the size where we want to appeal to an even larger base of consumers," Ek said. "That obviously means you'll see things like, for instance, the audiobook-only tier. ... You should also expect to see a music-only tier as well."
"The more value we create, the more ability we will have to then capture some of that value by price increases," Ek said.
Spotify stock has surged more than 100% over the past year and is up 73% year to date.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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