Spotify has announced another quarter of record profits, marking a significant turnaround one year after implementing a price increase for its Premium subscription plans for the first time.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement compared to a loss of 247 million euros ($268 million) from the same period last year. The number of monthly active users also saw a 14% increase year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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. 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 price increases for its Premium plans in the U.S. effective this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will incur a $3 increase, bringing their total to $20. This price adjustment came after the company raised membership costs by an average of $1 last July, the first increase in 13 years.
Despite these price hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding its previously provided guidance by one million.
Spotify continues to dominate as the leading audio streaming service globally, with a Bloomberg analysis showing that its users are less likely to cancel their subscriptions compared to those of other audio or video streaming platforms.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock value plummeted by more than two-thirds amid several quarters of operating losses. In response, the company announced layoffs, first cutting 600 jobs in January 2023, and then an additional 1,500 positions, amounting to approximately 17% of its workforce less than a year later.