Spotify has reported another quarter of record profits, marking a significant turnaround from the previous year when it raised its Premium plan prices for the first time.
The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, a sharp improvement compared to a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users increased by 14% year-over-year, reaching 626 million.
In a statement, CEO Daniel Ek expressed enthusiasm 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. This all bodes very well for the future.”
Following the financial report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price hikes for its Premium users in the U.S. Starting this month, individual plan subscribers will see an increase of $1, bringing their total to $12. Duo plan subscribers will pay an additional $2, totaling $17, while Family plan users will see a $3 increase, making it $20. This marked the first membership price increase in 13 years, which happened last July with an average rise of $1.
Despite these increases, Spotify managed to add seven million net subscribers in the quarter, exceeding its own guidance by one million.
As the leading audio streaming service globally, Spotify users are found to be the least likely to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. In 2022, the company’s stock lost over two-thirds of its value as it battled multiple quarters of operating losses. In response to these challenges, Spotify announced plans to eliminate 600 positions in January 2023, followed by another round of job cuts affecting around 1,500 employees, or approximately 17% of its workforce, less than a year later.