Spotify has announced another quarter of record profits, marking a significant turnaround just a year after implementing its first price increase for Premium plans.
In the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a substantial improvement compared to a loss of 247 million euros ($268 million) in the same period last year. Additionally, Spotify saw a 14% year-over-year growth in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed optimism, 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 users in the U.S. effective this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will incur a $3 increase, bringing their total to $20. This change follows an average membership cost raise of $1 last July, the first adjustment in 13 years.
Despite the price hikes, Spotify managed to gain seven million net subscribers in the quarter, surpassing its forecast by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis revealing that its users are among the least likely to cancel their subscriptions compared to other audio and video streaming platforms.
However, the company faced challenges in the past, with its stock losing more than two-thirds of its value in 2022 due to multiple quarters of operating losses. In January 2023, Spotify laid off 600 employees, and by the following year, it cut an additional 1,500 jobs, amounting to roughly 17% of its workforce.