Spotify has reported another quarter of record profits, marking a significant turnaround following the first price increase of its Premium plans a year ago. The Swedish audio streaming giant revealed an operating income of 266 million euros ($289 million) for the second quarter, an impressive recovery from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users surged by 14% year-on-year, 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
In the wake of this positive earnings report, Spotify’s stock experienced a nearly 14% increase in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its U.S. Premium subscribers, starting this month. Individual plan users will now pay $1 more, totaling $12, Duo plan users will pay $2 more, bringing the total to $17, and Family plan users will face a $3 increase, making it $20. This marked the first membership cost increase in 13 years by an average of $1.
Despite the increased prices, Spotify added seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the world’s leading audio streaming platform, Spotify users are noted to be the least likely to cancel their subscriptions compared to other audio or video streaming services, according to a Bloomberg analysis.
However, Spotify’s financial history has not always been robust. In 2022, the company saw its stock plummet by more than two-thirds amid several quarters of operating losses. In January 2023, Spotify announced the layoff of 600 employees, and less than a year later, the company further reduced its workforce by 1,500 jobs, representing roughly 17% of its total staff.