Spotify has reported another quarter of record profits, marking a significant turnaround since the company raised its Premium plan prices for the first time ever last year. In the second quarter, the Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), a major improvement compared to a loss of 247 million euros ($268 million) during the same period a year prior. The company also saw a 14% annual increase in monthly active users, reaching 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. This timeline has exceeded even our own expectations, boding very 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 its Premium users in the United States. Starting this month, individual plan users will see an increase of $1 to $12, Duo plan subscribers will pay an additional $2, bringing their total to $17, and Family plan users will face a $3 increase to $20. This move followed a price hike last July, the first in 13 years, which raised membership costs by an average of $1.
Despite the price increases, Spotify managed to add seven million net subscribers in the quarter, exceeding its prior guidance by one million.
Spotify continues to hold its position as the world’s most popular audio streaming service, with users reportedly less likely to cancel their subscriptions compared to competitors, according to a Bloomberg analysis. However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock lost more than two-thirds of its value amid several quarters of operating losses. In response to financial pressures, the company announced plans to lay off 600 employees in January 2023, followed by further job cuts affecting 1,500 employees, or roughly 17% of its workforce, less than a year later.