Spotify has announced another record profit for the second quarter, marking a significant turnaround since it raised the price of its Premium plans for the first time last year. The Swedish audio streaming company reported an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the platform’s monthly active users saw a 14% increase year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s direction, 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 announcement of its better-than-expected earnings, Spotify stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed price hikes for its Premium services in the U.S. Starting this month, individual plan subscribers will see an increase of $1, bringing the total to $12. Duo plan users will pay $2 more, totaling $17, while Family plan users will be charged an additional $3, now costing $20. Last July marked the first price adjustment in 13 years, with average increases of $1.
Despite these price increases, Spotify managed to gain seven million net subscribers during the quarter, surpassing its guidance by one million.
According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with users being the least likely to cancel their subscriptions compared to competitors in the audio and video streaming market.
However, the company faced challenges in previous years, losing over two-thirds of its stock value in 2022 due to several quarters of operating losses. In early 2023, Spotify announced it would lay off 600 employees, followed by a further reduction of 1,500 jobs, which accounted for about 17% of its workforce, less than a year later.