Spotify has announced another record profit quarter, a year after it implemented its first price increase for Premium plans. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, marking a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The platform also saw a 14% year-over-year increase 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.” He noted that their progress has exceeded even their own expectations, which bodes 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 price hikes for its Premium users in the U.S., which took effect this month. Users on individual plans will now pay $1 more, bringing their total to $12, while Duo plans increased by $2 to $17, and Family plans went up by $3 to $20. This marked the first membership cost increase in 13 years, averaging an increase of $1.
Despite the price increases, Spotify managed to add seven million net subscribers in the last quarter, exceeding their own guidance by one million.
Spotify remains the leading audio streaming service globally and has the lowest cancellation rate among major audio and video streaming platforms, according to a Bloomberg analysis. However, the company has faced challenges in the past, including a steep decline in stock value in 2022, when its shares lost over two-thirds of their worth due to multiple quarters of operating losses. Earlier this year, Spotify announced job cuts amounting to 600 employees, followed by a larger reduction of 1,500 jobs, roughly 17% of its workforce, less than a year later.