Spotify has announced another quarter of record profits, marking a significant turnaround since raising the prices of its Premium plans 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, a notable improvement from a loss of 247 million euros (around $268 million) during the same period last year. The number of monthly active users also saw a 14% increase 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. 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 an increase in prices for its Premium subscription options in the U.S. Starting this month, users on individual plans will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This adjustment followed a similar price hike last July, which was the first in 13 years, raising membership costs by an average of $1.
Despite the price increases, Spotify successfully added seven million net subscribers in the quarter, exceeding its guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly less likely to cancel their memberships compared to those of other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. Spotify’s stock value plummeted by more than two-thirds in 2022 due to consecutive quarters of operating losses. In early 2023, the company announced layoffs affecting 600 employees, followed by another round of job cuts impacting 1,500 workers, which represents about 17% of its workforce.