Spotify has reported another quarter of record profits, marking a significant turnaround following its first-ever price increase for Premium plans a year ago. The Swedish audio streaming platform posted an operating income of 266 million euros ($289 million) in the second quarter, a notable improvement from the loss of 247 million euros ($268 million) in the same period last year. Monthly active users also surged by 14% year-over-year to reach 626 million.
“We’re experiencing an exciting period at Spotify. We’re continuously innovating and proving that we’re not just an exceptional product but also an increasingly robust business,” stated CEO Daniel Ek. “Our progress has surpassed even our own expectations, indicating a positive outlook for the future.”
Following the favorable earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium services in the U.S., effective this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will incur a $3 increase, bringing the cost to $20. This was the first price hike for memberships in 13 years, averaging a $1 increase.
Despite these hikes, Spotify added seven million net subscribers in the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are the least likely to cancel their subscriptions compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial landscape has not always been so positive. The company’s stock plummeted by more than two-thirds in 2022 due to multiple quarters of operating losses. In early 2023, Spotify announced plans to cut 600 jobs and less than a year later, it reduced its workforce by 1,500 positions, accounting for approximately 17% of its staff.