Spotify has reported another quarter of record profits, marking a significant turnaround one year after its first price hike for Premium plans. The Swedish audio streaming service posted an operating income of 266 million euros ($289 million) in the second quarter, compared to a loss of 247 million euros ($268 million) a year earlier. Additionally, the number of monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism 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. We are doing so on a timeline that has exceeded even our own expectations, which bodes very well for the future.”
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading. In June, the company announced modest price increases for its Premium service in the U.S., which took effect this month. Individual plan subscribers will now pay $12, up $1; Duo plan users will pay $17, an increase of $2; and Family plans will cost $20, rising $3. This marked the first increase in 13 years, following a prior average hike of $1 last July.
Despite the price changes, Spotify successfully added seven million net subscribers during the quarter, exceeding its previous guidance by one million. A Bloomberg analysis highlighted that Spotify remains the most popular audio streaming platform globally, with users being among the least likely to cancel their subscriptions.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock lost more than two-thirds of its value amid several quarters of operating losses. In January 2023, the company announced a workforce reduction of 600 employees, followed by an additional cut of 1,500 jobs, or roughly 17% of its workforce, less than a year later.