Spotify has reported another record profit quarter, marking a notable turnaround since it raised the price of its Premium plans for the first time in its history one year ago.
The Swedish audio streaming giant announced an operating income of 266 million euros (approximately $289 million) for the second quarter, significantly improving from a loss of 247 million euros ($268 million) recorded during the same period last year. The number of monthly active users surged by 14% year-over-year, 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock increased nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S. Starting this month, individuals will see their plans rise by $1 to $12, Duo plans will increase by $2 to $17, and Family plans will go up by $3 to $20. The previous significant price increase occurred in July 2022, marking the first rise in membership costs in 13 years, averaging an increase of $1.
Despite these price adjustments, Spotify successfully added seven million net subscribers in the recent quarter, exceeding its prior forecast by one million.
As the leading audio streaming service globally, Spotify’s user base demonstrates the highest retention rates compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has faced challenges. The company’s stock plummeted by over two-thirds in 2022 amid consecutive quarters of operating losses. Earlier in January 2023, Spotify announced a workforce reduction of 600 employees, followed by an additional cut of 1,500 positions, representing around 17% of its total staff, less than a year later.