Spotify has announced another quarter of record profits, marking a significant turnaround following the first-ever price increase for its Premium plans last year.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a notable recovery from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s growth, 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, Spotify announced a price increase for its Premium service in the U.S. Beginning this month, individual plans are now priced at $12, an increase of $1; Duo plans (for two people) rose by $2 to $17; and Family plans increased by $3 to $20. This marked the first price adjustment in 13 years, with an average increase of $1 implemented last July.
Despite the price hikes, Spotify gained seven million net new subscribers in the quarter, surpassing previous estimates by one million.
As the leading audio streaming platform worldwide, a Bloomberg analysis found that Spotify users are the least likely among streaming services to cancel their subscriptions. However, the company’s financial performance has faced challenges in the past. In 2022, Spotify’s stock lost more than two-thirds of its market value due to multiple quarters of operating losses. In early 2023, the company announced the elimination of 600 positions, followed by an additional 1,500 job cuts, representing approximately 17% of its workforce.