Spotify has reported a record profit for another quarter, marking a significant milestone a year after it increased the prices of its Premium plans for the first time.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) in the second quarter, a remarkable turnaround from a loss of 247 million euros ($268 million) during the same period last year. The platform also saw a 14% increase in monthly active users, bringing the total to 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 added that the company’s progress has exceeded its own expectations, which bodes well for the future.
Following the release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium users in the United States. Starting this month, those on individual plans will see a $1 increase to $12, Duo plans will cost $2 more at $17, and Family plans will rise by $3 to $20. Last July marked the first price increase in 13 years, averaging $1.
Despite these price hikes, Spotify added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the world’s leading audio streaming platform, Spotify users show the lowest propensity to cancel their memberships compared to other audio or video streaming services, according to a Bloomberg analysis.
However, Spotify’s financial history has not always been positive. The company faced significant challenges in 2022, with its stock plummeting over two-thirds of its value. The following January, Spotify announced layoffs affecting 600 employees, followed by another round of cuts impacting 1,500 employees, which represents about 17% of its workforce.