Spotify has announced another quarter of record profits, marking a notable improvement since it increased the prices of its Premium plans for the first time last year.
In the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) the previous year. Monthly active users rose by 14% year-on-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.” He noted that their performance has exceeded expectations, which is promising for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced price increases for its Premium users in the U.S. starting this month. Individual plans will see an increase of $1 to $12, Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This change follows the company’s first price hike in 13 years, which occurred last July.
Despite the price adjustments, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming platform globally, with users generally less likely to cancel their subscriptions compared to competitors, according to a Bloomberg analysis.
However, the company’s financial performance has had its challenges. Spotify’s stock value dropped over two-thirds in 2022 due to several quarters of operating losses. In January 2023, the company announced layoffs of 600 employees and later cut approximately 1,500 jobs, representing around 17% of its workforce.