Spotify has announced another record profit quarter, marking a significant turnaround since it raised its Premium plan prices for the first time last year. The Swedish audio streaming company reported an operating income of 266 million euros (approximately $289 million) for the second quarter, contrasting with a loss of 247 million euros ($268 million) from the same period last year. Additionally, the number of monthly active users climbed to 626 million, reflecting a 14% year-over-year increase.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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.” He added that the company’s growth timeline has surpassed even their own expectations, which is promising for future developments.
Following the 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 services in the U.S., which took effect this month. Individual plan users will see a $1 increase to $12, Duo plan users will incur a $2 rise to $17, and Family plan users will pay $3 more, bringing their total to $20. This price adjustment came after an average increase of $1 last July, marking the first membership cost hike in 13 years.
Despite these increases, Spotify added seven million net subscribers in the recent quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally and has been described as having the lowest likelihood of its users canceling subscriptions compared to other streaming platforms, according to a Bloomberg analysis. However, it has faced financial challenges, including a significant drop in stock value last year, where it lost over two-thirds of its worth amid multiple quarters of operating losses. In response, the company announced plans to lay off 600 employees in January 2023 and further cut 1,500 jobs, amounting to roughly 17% of its workforce, less than a year later.