Spotify has reported another quarter of record profits, marking a notable turnaround after it raised its Premium plan prices for the first time in history a year ago.
The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) in the second quarter, a stark contrast to a loss of 247 million euros ($268 million) from the same period last year. The company also saw a 14% year-over-year growth in monthly active users, reaching 626 million.
“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,” stated CEO Daniel Ek. He emphasized that the company’s performance has exceeded even their own expectations, which bodes well for its future.
Following this 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 an increase of $1, bringing their total to $12, while Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This adjustment came a year after the company implemented its first membership cost hikes in 13 years, averaging an increase of $1.
Despite these price hikes, Spotify added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Bloomberg analysis indicates that Spotify remains the world’s most popular audio streaming service, with users being less likely to cancel their subscriptions compared to other streaming giants.
However, the company has faced challenges in the past; its stock value plummeted by more than two-thirds in 2022 due to multiple quarters of operating losses. In January 2023, Spotify announced the layoff of 600 employees, followed by a further reduction of around 1,500 jobs, equating to roughly 17% of its workforce, less than a year later.