Spotify has once again reported a record profit for the second quarter, marking a significant turnaround since the previous year when it faced losses following the first-ever price increase of its Premium subscription plans.
The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the quarter, a drastic improvement from the loss of 247 million euros ($268 million) reported in the same period last year. The company also saw a 14% year-over-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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 release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced that it would be increasing prices for its Premium plan in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will see a $2 increase to $17, and Family plan users will pay $3 more, totalling $20. This marks the first membership price increase in 13 years, which took place last July with an average rise of $1.
Despite the price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its own expectations by one million.
Spotify remains the leading audio streaming platform globally, and a Bloomberg analysis indicated that its subscribers are the least likely to cancel compared to other streaming services. However, the company’s financial health has seen its ups and downs; in 2022, Spotify’s stock lost more than two-thirds of its value amid several quarters of financial losses. Earlier this year, it announced job cuts affecting 600 employees, followed by a further reduction of 1,500 jobs, or approximately 17% of its workforce, less than a year later.