Spotify has announced another record quarter of profits just a year after implementing its first-ever price increase for Premium subscriptions.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a striking turnaround from a loss of 247 million euros ($268 million) in the same quarter last year. Additionally, the platform saw a 14% increase in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its U.S. Premium users, which took effect this month. Individual plan users will now pay an extra dollar, raising the cost to $12; Duo plans are up by $2 to $17; and Family plans will cost $3 more, totaling $20. This marked the first price increase in 13 years for the company, which raised membership costs by an average of $1 last July.
Despite these increases, Spotify welcomed seven million net new subscribers in the latest quarter, exceeding its prior guidance by one million.
Spotify remains the leading audio streaming service globally, with users displaying a lower tendency to cancel subscriptions compared to other audio or video streaming services, as noted by a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. Spotify’s stock value plummeted by over two-thirds in 2022 due to several quarters of operating losses. In January 2023, the company announced a reduction of 600 employees and less than a year later, it cut 1,500 jobs, amounting to approximately 17% of its workforce.