Spotify has announced another impressive quarter of record profits, marking a significant turnaround since it raised the price of its Premium plans for the first time in its history last year.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a remarkable recovery compared to a loss of 247 million euros ($268 million) the previous year. Additionally, the company saw a 14% increase in its monthly active users, reaching a total of 626 million.
In a statement, CEO Daniel Ek expressed enthusiasm about the company’s current trajectory, 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 optimistic 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 U.S. Starting this month, individual plan subscribers will see a $1 hike to $12, while Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. The previous price hike in July 2022 was the first adjustment in 13 years, averaging an increase of $1.
Despite these increases, Spotify added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming platform globally, and a Bloomberg analysis indicates that its users are less likely than those of any other audio or video streaming service to cancel their subscriptions.
However, it hasn’t always been smooth sailing for Spotify. The company’s stock plummeted by more than two-thirds in 2022 due to prolonged operating losses. In January 2023, Spotify announced plans to lay off 600 employees, followed by a further cut of 1,500 jobs, which constituted about 17% of its workforce, less than a year later.