Spotify has reported record profits for another quarter, marking a significant turnaround since the company raised the prices of its Premium plans for the first time last year. In the second quarter, Spotify announced an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% increase in monthly active users, reaching a total of 626 million.
CEO Daniel Ek 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.”
Following the announcement of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium plans in the U.S., which took effect this month. Individual plan users will now pay $12, an increase of $1; Duo plans will rise by $2 to $17; and Family plans will increase by $3 to $20. This recent adjustment follows a similar hike last July, the first in 13 years, which averaged an additional $1 per subscription.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous forecast by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their subscriptions, according to a Bloomberg analysis.
However, Spotify’s financial performance has not always been strong. In 2022, the company’s stock value plummeted by more than two-thirds as it grappled with several quarters of operating losses. Earlier this year, Spotify announced job cuts, initially laying off 600 employees in January, followed by an additional reduction of 1,500 jobs, representing about 17% of its workforce.