Spotify has announced another quarter of record profits, marking a significant turnaround from last year when it faced losses following its first price increase for Premium plans.
In the second quarter, the Swedish audio streaming giant recorded an operating income of 266 million euros ($289 million), a notable improvement compared to a loss of 247 million euros ($268 million) in the same period last year. The company also saw its monthly active users rise by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s progress, 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. 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 an increase in prices for U.S. Premium users, effective this month. Individual plan users will see an increase of $1, bringing the total to $12, while Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This price adjustment follows a similar rise last July when the company raised membership costs for the first time in 13 years by an average of $1.
Despite the price hikes, Spotify added a net total of seven million subscribers during the quarter, surpassing its earlier expectations by one million.
According to a Bloomberg analysis, Spotify remains the most popular audio streaming service worldwide and users are less likely to cancel their memberships compared to other audio or video streaming platforms.
However, Spotify’s financial journey has not always been smooth. In 2022, the company’s stock plummeted by more than 66%, following several quarters of operating losses. In January 2023, Spotify announced it would cut 600 jobs, and later reduced its workforce by an additional 1,500 employees, around 17% of its total staff.