Spotify has announced another quarter of record profits, marking a significant turnaround since it increased the prices of its Premium plans for the first time last year.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a substantial improvement from a loss of 247 million euros ($268 million) in the same period last year. The platform’s monthly active users rose by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s performance, 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, Spotify announced a price increase for its Premium subscription in the U.S. Starting this month, individual plan subscribers will pay an additional dollar, bringing their total to $12. Duo plan subscribers will see their fees rise by $2 to $17, while Family plan users will pay $3 more, totaling $20. This marked the first price hike in 13 years for the service, which implemented an average increase of $1 last July.
Despite the price increases, Spotify added seven million net subscribers in the latest quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify is known for having users who are less likely to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company has not always fared well financially. In 2022, Spotify’s stock plummeted by more than two-thirds as it experienced several quarters of operating losses. In January 2023, the company announced it would lay off 600 employees, and less than a year later, it further reduced its workforce by approximately 1,500 jobs, representing about 17% of its staff.