Spotify has announced another quarter of record profits, marking a significant turnaround following its first-ever price increase for Premium plans last year. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) in the second quarter, compared to a loss of 247 million euros ($268 million) a year earlier. The company also saw a 14% annual growth in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’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 price increases for its Premium users in the U.S. Beginning this month, individual plan users will pay $12 (an increase of $1), Duo plan users will pay $17 (an increase of $2), and Family plan users will pay $20 (an increase of $3). This price hike followed an average membership cost rise of $1 implemented in July of the previous year, marking the first increase in 13 years.
Despite these increases, Spotify added seven million net subscribers in the recent quarter, surpassing its prior guidance by one million.
A Bloomberg analysis found that Spotify remains the most popular audio streaming service globally, with users being the least likely to cancel their subscriptions compared to other audio and video streaming platforms.
However, the company has faced challenges in recent years, losing over two-thirds of its stock value in 2022 due to several quarters of operating losses. In response, Spotify announced plans to cut 600 jobs in January 2023, followed by a reduction of 1,500 positions, or about 17% of its workforce, less than a year later.