Spotify has announced another record profit for the second quarter, marking a significant turnaround since raising the prices of its Premium plans for the first time a year ago. The Swedish audio streaming company reported an operating income of 266 million euros ($289 million), a notable increase from a loss of 247 million euros ($268 million) the previous year. Additionally, the number of monthly active users rose by 14% year-over-year, reaching 626 million.
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 their achievements have surpassed their expectations, indicating a positive outlook 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 an increase in prices for its Premium services in the U.S. Effective this month, individual plan users will see a $1 increase to $12, Duo plan users will pay an additional $2 for a total of $17, and Family plan users will incur a $3 rise to $20. This marked the first price hike in 13 years for Spotify, with an average increase of $1 last July.
Despite the price increases, Spotify managed to add seven million net subscribers in the quarter, surpassing its prior guidance by one million.
Spotify remains the leading audio streaming platform globally, and analyses suggest that its users are less inclined to cancel their subscriptions compared to other audio and video streaming services. However, the company has faced financial challenges in the past. In 2022, Spotify’s stock value plummeted by more than two-thirds as it registered several quarters of operating losses. In early 2023, the company announced a reduction of 600 employees, followed by another cut of 1,500 jobs, representing about 17% of its workforce.