Spotify has reported a record profit for another quarter, marking a significant turnaround since it raised the price of its Premium plans for the first time last year. The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) it experienced during the same period a year ago. The number of monthly active users also rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm in a statement, saying, “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 announcement, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced an increase in subscription prices for Premium users in the U.S., effective this month. Individual plan users will see a $1 increase to $12, while Duo plans will rise by $2 to $17 and Family plans will increase by $3 to $20. This price hike followed last July’s adjustment, which marked the first increase in 13 years at an average of $1.
Despite raising prices, Spotify managed to add seven million net subscribers during the quarter, surpassing its own projections by one million.
Bloomberg’s analysis indicates that Spotify remains the world’s leading audio streaming service, with its users being the least likely to cancel their memberships compared to other audio or video streaming platforms. However, Spotify’s financial journey has not always been smooth. In 2022, the company’s stock depreciated by over two-thirds as it faced multiple quarters of operating losses. In January 2023, Spotify announced it would lay off 600 employees, followed by another round of cuts in which 1,500 workers, or about 17% of its workforce, were let go less than a year later.