Spotify has announced another quarter of record profits, marking a significant turnaround from the previous year when it raised the prices of its Premium plans for the first time. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. The company also saw its monthly active users increase by 14% year-over-year, reaching 626 million.
In a statement, CEO Daniel Ek expressed excitement 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price hike for U.S. Premium users. Starting this month, the cost for individual plans will increase by $1 to $12, while Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This price adjustment followed an average increase of $1 in membership costs last July, marking the first increase in 13 years.
Despite these price hikes, Spotify succeeded in adding seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming platform globally, Spotify users show a lower tendency to cancel their subscriptions compared to users of other audio or video streaming services, according to a Bloomberg analysis.
However, the company has faced challenges in its financial performance in the past. Spotify’s stock value dropped significantly in 2022, losing more than two-thirds of its worth amid several quarters of operating losses. In early 2023, the company announced plans to lay off 600 employees, and less than a year later, it cut an additional 1,500 jobs, or about 17% of its workforce.