Spotify has announced record profits for another quarter, marking a significant turnaround since the company raised its Premium plan prices for the first time last year.
In the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million), a notable improvement from a loss of 247 million euros ($268 million) in the same quarter last year. The platform also saw a 14% year-over-year increase in monthly active users, reaching a total of 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, Spotify announced a price increase for its Premium subscriptions in the U.S., effective this month. Individual plan subscribers will see a $1 increase to $12, Duo plan users will pay $2 more, bringing their total to $17, and Family plan subscribers will experience a $3 hike, totaling $20. The company had previously raised membership costs for the first time in 13 years in July 2022, with an average increase of $1.
Despite these price hikes, Spotify managed to gain seven million net new subscribers in the last quarter, exceeding its earlier guidance by one million.
As the world’s leading audio streaming service, Spotify users reportedly have the lowest cancellation rates compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company has faced challenges in the past, with Spotify’s stock value dropping by more than two-thirds in 2022 due to multiple quarters of operating losses. In early 2023, the company announced layoffs of 600 employees and followed this with another 1,500 job cuts, representing about 17% of its workforce.