Spotify has announced another quarter of record profits, marking a significant turnaround since it raised its Premium subscription prices for the first time last year.
The Swedish audio streaming giant reported an operating income of 266 million euros (approximately $289 million) in the second quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. The company also reported a 14% year-over-year increase in monthly active users, totaling 626 million.
CEO Daniel Ek described the current period as an exciting time for Spotify, emphasizing the company’s commitment to innovation and its evolution into a profitable business. He stated that the timeline for achieving these results has surpassed their expectations, signaling optimism for the future.
Following the release of this favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify confirmed a price increase for its Premium users in the U.S. Starting this month, individual plan subscribers will see their rates rise by $1 to $12, while Duo plan users will pay $2 more, bringing their total to $17. Family plan subscribers will face a $3 increase, resulting in a new cost of $20. This marked the company’s first price hike in 13 years, with previous adjustments averaging $1.
Despite these increases, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous forecast by one million.
Spotify remains the world’s leading audio streaming service, with users statistically less likely to cancel subscriptions compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial history has not always been stable. The company’s stock plummeted by over two-thirds in 2022 due to several quarters of losses. In January 2023, it announced cuts of 600 positions, followed by another reduction of approximately 1,500 jobs, representing about 17% of its workforce, less than a year later.