Spotify has reported another record profit quarter, marking a significant turnaround from its previous financial struggles following a price increase in its Premium plans last year.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) reported during the same period last year. The company also experienced a 14% annual growth in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify disclosed plans to increase Premium subscription prices in the U.S. Beginning this month, individual plan users will see an increase of $1, bringing the total to $12, while those on Duo plans will see a $2 increase to $17, and Family plan users will pay $3 more, totaling $20. This was the first price hike in 13 years for Spotify, with the average increase being $1.
Despite these price hikes, Spotify managed to add seven million net subscribers in the last quarter, surpassing its guidance by one million.
According to a Bloomberg analysis, Spotify remains the world’s leading audio streaming service, with its users showing the least likelihood of canceling their subscriptions compared to other audio and video streaming platforms.
However, the company’s financial landscape has not always been favorable. In 2022, Spotify’s stock lost more than two-thirds of its value amid several quarters of operating losses. In January 2023, the company announced the layoff of 600 employees, followed by a further reduction of 1,500 jobs, accounting for about 17% of its workforce, less than a year later.