Spotify has announced another record-setting quarter of 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 considerable improvement from a loss of 247 million euros ($268 million) during the same period last year. The service also saw a 14% increase in monthly active users, 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.”
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 users in the U.S. Starting this month, individuals will pay an additional $1, bringing the total to $12, while Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This was the first membership cost increase in 13 years, averaging $1.
Despite the price hikes, Spotify successfully added seven million net subscribers in the latest quarter, surpassing its previous guidance by one million.
As the world’s leading audio streaming service, Spotify’s users are reported to be the least likely among audio and video streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, the company’s financial journey has faced challenges. In 2022, Spotify’s stock value plummeted by more than two-thirds, driven by several quarters of operational losses. In January 2023, the company announced the elimination of 600 positions, and nearly a year later, it laid off 1,500 employees, amounting to about 17% of its workforce.