Spotify has announced another quarter of record profits, marking a significant turnaround since the company’s first-ever price increase for its Premium plans last year.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a remarkable recovery from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users saw a 14% annual increase, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only a great product but also becoming a strong business,” stated CEO Daniel Ek. “Our progress has surpassed even our own expectations, which bodes 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 hike for its U.S. Premium users, which took effect this month. Individual plan users will now pay an additional $1, bringing the total to $12. Duo plan users will see an increase of $2 to $17, while Family plan users will pay $3 more, now totaling $20. This follows a price increase last July, the first in 13 years, which raised membership costs by an average of $1.
Despite these increases, Spotify managed to add seven million net subscribers in the quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with users showing the lowest likelihood of canceling their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock lost over two-thirds of its value due to several quarters of operating losses, leading to job cuts. In January 2023, the company laid off 600 employees, and less than a year later, another 1,500 jobs were eliminated, amounting to approximately 17% of its workforce.