Spotify has reported another quarter of record profits, marking a significant turnaround one year after it increased the prices of its Premium plans for the first time ever.
The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) reported during the same period last year. Additionally, the company saw its monthly active users rise by 14% year-over-year to 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 favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S., effective this month. Individual plan users will see their monthly fee increase by $1 to $12, while Duo plans will rise by $2 to $17 and Family plans by $3 to $20. This price adjustment followed an average increase of $1 in July 2022, the first hike in 13 years.
Despite these price adjustments, Spotify managed to gain seven million net subscribers during the quarter, exceeding its prior guidance by one million.
Spotify remains the leading audio streaming service globally, and a Bloomberg analysis found that its users are the least likely among audio and video streaming platforms to cancel their subscriptions.
However, the company’s financial journey has faced challenges. In 2022, Spotify’s stock value plummeted by more than two-thirds due to multiple quarters of operating losses. In response to these difficulties, the company announced a workforce reduction of 600 employees in January 2023 and later cut 1,500 jobs, approximately 17% of its total staff, less than a year later.