Spotify has reported another quarter of record profits, marking a significant turnaround since raising its Premium plan prices for the first time last year. The Swedish audio streaming company announced an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the 247 million euros ($268 million) loss it experienced during the same period last year. Monthly active users have also seen a growth of 14% year-over-year, reaching 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.”
In response to the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
As of June, Spotify announced price increases for its Premium plans in the U.S. starting this month. Individual plan subscribers will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan subscribers will face a $3 increase, bringing their total to $20. This marked the first price hike in 13 years, with last July’s increase averaging $1.
Despite these price hikes, the company added seven million net subscribers in the quarter, exceeding its previous guidance by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with its users being less likely to cancel their memberships compared to users of other audio and video streaming platforms. However, the company’s financial history has not always been prosperous. In 2022, Spotify’s stock value fell by more than two-thirds amid multiple quarters of operating losses. Earlier this year, the company announced job cuts, reducing its workforce by 600 employees in January, followed by an additional 1,500 layoffs, amounting to about 17% of its staff.