Spotify has announced impressive quarterly profits, marking a significant turnaround after it raised the price of its Premium plans for the first time last year. For the second quarter, the Swedish audio streaming platform reported an operating income of 266 million euros ($289 million), a substantial increase from a loss of 247 million euros ($268 million) the previous year. The number of monthly active users also saw a notable rise of 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s innovative progress and business growth, 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 its positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price increases for its Premium plans in the U.S. Starting this month, individual plan users will see a $1 increase to $12, users on Duo plans will pay $2 more at $17, and Family plan subscribers will pay $3 extra, totaling $20. This was the first price hike in 13 years, as last July the company raised membership costs on average by $1.
Despite the price adjustments, Spotify successfully added seven million net subscribers in the quarter, exceeding its prior guidance by one million.
As the leading audio streaming service worldwide, Spotify has shown resilience, with its users demonstrating a lower likelihood of canceling subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company has faced financial challenges previously, with its stock losing over two-thirds of its value in 2022 due to multiple quarters of operating losses. Earlier this year, Spotify announced workforce reductions, cutting 600 positions in January and an additional 1,500 jobs—approximately 17% of its staff—by the end of the year.