Spotify has reported another quarter of record profits, marking a significant rebound since it raised the prices of its Premium plans for the first time last year. The Swedish audio streaming platform posted an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. In addition, the company experienced a 14% annual increase in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s performance, 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, which bodes very well for the future.”
Following the announcement of its better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium offerings in the U.S. beginning this month. Individual plans will see a $1 increase to $12, Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This price adjustment came after the company raised membership costs for the first time in 13 years last July, with an average increase of $1.
Despite these price hikes, Spotify managed to add seven million net subscribers in the last quarter, surpassing its previous guidance by one million.
Spotify continues to hold its position as the leading audio streaming service globally, with users showing a lower propensity to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial history has seen challenges. In 2022, Spotify’s stock lost more than 66% of its value amid several quarters of operating losses. In early 2023, the company announced plans to lay off 600 employees, followed by cuts affecting 1,500 jobs, which constitutes about 17% of its workforce.