Spotify has announced another quarter of record profits, marking a significant turnaround since it first raised the price of its Premium plans. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, in stark contrast to a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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. This all bodes very well for the future.”
Following the announcement of better-than-expected earnings, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed plans to increase prices for its Premium users in the U.S. Starting this month, individual plan users will pay an additional dollar, bringing the total to $12. Duo plans will see a $2 increase to $17, while Family plans will rise by $3 to $20. This marks the first price hike in 13 years, with an average increase of $1 last July.
Despite the price adjustments, Spotify added seven million net subscribers in the last quarter, exceeding its previous forecast by one million. According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with users being less likely to cancel their subscriptions compared to competitors in both audio and video streaming.
However, Spotify’s 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 affecting 600 employees, and later reduced its workforce by 1,500, which represents approximately 17% of its total staff.