Spotify has reported another quarter of record profits, marking a significant turnaround from last year when it raised the prices of its Premium plans for the first time.
The Swedish audio streaming giant posted an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) recorded during the same period last year. The number of monthly active users also surged, growing 14% year-on-year to reach 626 million.
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 expectations. This all bodes very well for the future.”
Following the release of its earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S. Starting this month, individual plan subscribers will see an increase of $1, bringing their monthly fee to $12, while Duo plans will go up by $2 to $17, and Family plans will rise by $3 to $20. This price adjustment came a year after the company raised its membership costs for the first time in 13 years.
Despite the price increases, Spotify successfully added seven million net subscribers in the quarter, surpassing its earlier expectations by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are the least likely to cancel their subscriptions compared to other audio and video streaming platforms. However, the financial journey has not always been smooth; in 2022, Spotify’s stock value plummeted by more than two-thirds, resulting in multiple quarters of operational losses. In January 2023, the company revealed plans to cut 600 jobs, and less than a year later, it reduced its workforce by 1,500 positions, amounting to approximately 17% of its staff.