Spotify has announced another quarter of record profits, marking a successful turnaround since it raised the prices of its Premium plans for the first time last year.
The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) in the second quarter, a notable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The platform also experienced a 14% year-over-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm regarding the company’s performance, 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 saw a nearly 14% increase in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium subscriptions in the U.S. Effective this month, users on individual plans will pay an additional $1, bringing the cost to $12. Duo plan subscribers will see a $2 increase to $17, while Family plan subscribers will face a $3 hike to $20. This price adjustment followed the company’s first membership cost increase in 13 years, which averaged $1 last July.
Despite these price hikes, Spotify successfully gained seven million net subscribers during the quarter, exceeding its earlier projections by one million.
As the leading audio streaming service globally, Spotify maintains a loyal user base, with analysis indicating that its subscribers are the least likely to cancel their memberships compared to competitors in both audio and video streaming.
However, Spotify’s financial journey has seen challenges. In 2022, the company’s stock value plummeted by more than two-thirds due to multiple quarters of operating losses. In January 2023, Spotify revealed plans to eliminate 600 positions, and less than a year later, it announced job cuts amounting to 1,500 employees, roughly 17% of its workforce.