Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the price of its Premium plans for the first time last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the platform saw a 14% annual increase in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We keep innovating and proving that we are not just a great product but also a strong business,” stated CEO Daniel Ek. He expressed optimism for the company’s future, noting that its progress has exceeded expectations.
In response to the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price increases for its Premium subscriptions in the U.S., which began this month. Individual plan users will see an increase of $1 to $12, Duo plan users will pay $2 more at $17, and Family plan subscribers will pay $3 more for a total of $20. This marks the first price hike in 13 years, as the company had previously raised membership costs by an average of $1 in July.
Despite these increases, Spotify added seven million net subscribers in the latest quarter, exceeding its earlier forecast by one million.
Spotify continues to hold its position as the leading audio streaming service globally, with an analysis from Bloomberg indicating that its users are the least likely to cancel their subscriptions compared to other audio and video streaming platforms. However, the company’s financial history hasn’t always been positive. In 2022, Spotify’s stock plummeted by over two-thirds in value due to several quarters of losses, leading to announcements in January 2023 regarding a reduction of 600 employees, followed by the layoff of 1,500 jobs, around 17% of its workforce, less than a year later.