Spotify has announced another quarter of record profits, marking a significant turnaround after just one year since it first increased the price of its Premium plans.
The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) for the second quarter, in stark contrast to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users grew by 14% year-over-year, reaching 626 million.
“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,” stated CEO Daniel Ek. He added that the progress has exceeded even the company’s own expectations, indicating a positive outlook for the future.
Following the promising earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S., which took effect this month. Individual plan users will pay $1 more, bringing the cost to $12, while Duo plans will increase by $2 to $17, and Family plans by $3 to $20. This marked the first price hike in 13 years, with an average increase of $1 last July.
Despite these price hikes, Spotify gained seven million net subscribers in the quarter, exceeding its previous guidance by one million.
Spotify continues to lead as the most popular audio streaming service worldwide, and a Bloomberg analysis indicated that its users are the least likely among streaming platforms to cancel their memberships.
However, the financial journey for Spotify has not always been smooth. In 2022, the company’s stock value plummeted by more than two-thirds, as it grappled with multiple quarters of operating losses. In January 2023, Spotify announced it would lay off 600 employees, and less than a year later, cut 1,500 positions, equating to about 17% of its workforce.