Spotify has reported another quarter of record profits, marking a significant turnaround after it raised the price of its Premium plans for the first time ever a year ago. The Swedish audio streaming service recorded an operating income of 266 million euros (approximately $289 million) in the second quarter, a notable improvement from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users grew by 14% year-on-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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for its Premium subscribers in the U.S. Starting this month, users on individual plans will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan subscribers will see a $3 increase to $20. This price adjustment follows the company’s first membership cost hike in 13 years, which averaged $1 last July.
Despite these price hikes, Spotify managed to add seven million net subscribers in the most recent quarter—an increase of one million beyond their previous forecasts.
As the world’s leading audio streaming service, Spotify’s users are reportedly the least likely to cancel subscriptions compared to other streaming platforms, according to a Bloomberg analysis. However, the company has not always enjoyed robust financial health. In 2022, Spotify’s stock plummeted by over two-thirds as it grappled with several quarters of operating losses. In January 2023, the company announced plans to lay off 600 employees, followed by a further cut of 1,500 jobs, which accounted for roughly 17% of its workforce, less than a year later.