Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year. The Swedish audio streaming platform reported 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. Monthly active users also saw a 14% increase year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Spotify’s stock surged nearly 14% in pre-market trading on Tuesday following the announcement of its better-than-expected earnings.
In June, the company revealed plans to increase prices for its Premium users in the U.S. Beginning this month, those on individual plans will see a $1 increase to $12, Duo plan users will pay an additional $2 for a total of $17, and Family plan users will incur a $3 rise, bringing their cost to $20. Last July, Spotify had raised its membership fees for the first time in 13 years by an average of $1.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, exceeding its earlier guidance by one million.
Spotify remains the leading audio streaming service globally, and a recent Bloomberg analysis indicated that its users are among the least likely to cancel their subscriptions compared to other audio and video streaming platforms. However, the company’s financial journey has not always been smooth. Spotify’s stock lost over two-thirds of its value in 2022 due to multiple quarters of operating losses. In January 2023, the company announced layoffs of 600 employees, followed by another round of cuts in less than a year, affecting 1,500 jobs, or approximately 17% of its workforce.