Spotify has announced another record profit quarter, marking a significant turnaround since its first price increase for Premium plans last year.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, contrasting sharply with a loss of 247 million euros ($268 million) the previous year. Monthly active users surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress: “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 earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S., effective this month. Individual plan users will see an increase of $1 to $12, Duo plan users will pay $2 more, bringing the total to $17, and Family plan subscribers will incur a $3 increase, totaling $20. This marked the first price rise in 13 years, when the company adjusted membership fees by an average of $1.
Despite the price adjustments, Spotify reported adding seven million net new subscribers during the quarter, exceeding its previous forecast by one million.
As the leading audio streaming platform globally, Spotify enjoys a loyal user base, with a Bloomberg analysis indicating that its subscribers are the least likely to cancel their memberships compared to other audio and video streaming services.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock plummeted by over two-thirds, driven by several quarters of operational losses. In January 2023, the company announced layoffs of 600 employees, followed by a subsequent reduction of approximately 1,500 jobs, or 17% of its workforce, within less than a year.