Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the price of its Premium plans for the first time ever last year.
The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) during the second quarter, a stark contrast to the loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users has grown by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s future, 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 progress has surpassed its initial expectations.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its U.S. Premium users, effective this month. Individual plans will now cost $12, an increase of $1; Duo plans will increase by $2 to $17; and Family plans will rise by $3 to $20. This price hike came after the company raised membership costs by an average of $1 for the first time in 13 years in July of the previous year.
Despite these price increases, Spotify gained seven million net subscribers in the last quarter, surpassing its previous forecast by one million.
While Spotify is currently the leading audio streaming platform globally and has shown resilience against subscriber cancellations, its financial journey has not always been smooth. The company’s stock plummeted by more than two-thirds in 2022 due to several quarters of operating losses. In early 2023, Spotify announced layoffs of 600 employees and, less than a year later, cut 1,500 jobs, accounting for approximately 17% of its workforce.