Spotify has announced another quarter of record profits, marking a significant turn since it raised the prices of its Premium plans for the first time last year.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) in the second quarter, a stark contrast to the 247 million euros ($268 million) loss it experienced the same time last year. In addition, the company saw a 14% year-over-year increase in monthly active users, reaching a total of 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only an excellent product but also a thriving business,” stated CEO Daniel Ek. He expressed confidence in the company’s growth, calling it a timeline that has exceeded even their own expectations, which he believes is promising for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced upcoming price increases for its U.S. Premium subscribers. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more, bringing it to $17, and Family plan users will see a $3 increase to $20. This price adjustment follows a similar move in July 2022 when Spotify raised its membership fees for the first time in 13 years by an average of $1.
Despite the price hikes, Spotify added seven million net subscribers in the recent quarter, surpassing its guidance by one million.
Spotify remains the world’s leading audio streaming platform, and according to a Bloomberg analysis, its users are the least likely to cancel their memberships compared to other major audio or video streaming services.
However, Spotify’s financial journey has not always been smooth. The company’s stock lost over two-thirds of its value in 2022 due to several quarters of operating losses. In January 2023, Spotify announced layoffs of 600 employees, followed by another round of cuts affecting 1,500 jobs, or approximately 17% of its workforce, less than a year later.