Spotify has announced another quarter of record profits, marking a significant turnaround a year after the company increased the price of its Premium subscription plans for the first time.
In the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million), in contrast to a loss of 247 million euros ($268 million) in the same period last year. The company also saw a 14% annual increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’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. 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 price increases for its Premium plans in the U.S. starting this month. Individual plan users will now pay $12 instead of $11, Duo plan subscribers will pay $17 instead of $15, and Family plan users will see a charge of $20, up from $17. This marked the first price increase in 13 years, with an average increase of $1 implemented last July.
Despite these price hikes, Spotify added seven million net subscribers during the quarter, exceeding its own guidance by one million.
As the leading audio streaming platform globally, Spotify has been noted for having the lowest membership cancellation rates compared to its competitors in the audio and video streaming space, according to a Bloomberg analysis.
However, the company’s financial journey has had its challenges. Spotify’s stock lost over two-thirds of its value in 2022 amid continuous operating losses. In early 2023, the company announced layoffs affecting 600 employees, followed by the elimination of 1,500 jobs, which accounted for roughly 17% of its workforce.