Spotify has announced another quarter of record profits, marking a significant turnaround since the company raised the prices of its Premium plans for the first time last year.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) recorded in the same period last year. The platform also saw a 14% increase in monthly active users, reaching 626 million.
“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,” stated CEO Daniel Ek. He expressed optimism about the company’s trajectory, noting that developments have surpassed even their own expectations, which bodes well for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for Premium users in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more for a total of $17, and those on Family plans will see a $3 increase to $20. This marked the first membership cost hike in 13 years, which averaged $1.
Despite the price adjustments, Spotify successfully added seven million net subscribers in the latest quarter, exceeding its previous guidance by one million.
According to a Bloomberg analysis, Spotify remains the world’s leading audio streaming platform, with its users being the least likely among streaming services to cancel their subscriptions.
However, Spotify’s financial performance has not always been robust. The company’s stock plummeted by more than two-thirds in 2022 amid a series of operational losses. In January 2023, Spotify announced plans to lay off 600 employees. Less than a year later, the company cut 1,500 jobs, amounting to approximately 17% of its workforce.