Spotify has announced another record profit for the second quarter, marking a significant turnaround following its first-ever price increase for its Premium plans last year. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% annual growth in monthly active users, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s progress, noting, “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 rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium subscriptions in the U.S. Starting this month, individual plan users will pay $1 more, now totaling $12, while Duo plan users will see a $2 increase to $17, and Family plan users will pay $3 more, bringing their total to $20. This marked the first price increase in 13 years for the company.
Despite these increases, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the most popular audio streaming service globally, Spotify users have shown the least tendency to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company’s financial history has not been without challenges. In 2022, Spotify’s stock value declined by more than two-thirds, leading to several quarters of operating losses. In early 2023, the company announced it would lay off 600 employees, followed by another round of cuts affecting 1,500 jobs, approximately 17% of its workforce, less than a year later.