Spotify has announced another quarter of record profits, marking a significant turnaround one year after its first-ever price increase for Premium plans.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) in the same period last year. Monthly active users surged by 14% year-on-year, now totaling 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only an excellent product but also a flourishing business,” said CEO Daniel Ek. He added that the company’s progress has surpassed their own expectations, suggesting a positive outlook for the future.
Following the announcement of these better-than-expected earnings, Spotify’s stock price jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed a price hike for its U.S. Premium users, which took effect this month. Individual plan users will now pay $12, a $1 increase, while Duo plans will cost $17, up by $2, and Family plans will rise to $20, an increase of $3. Last July, the company raised its membership costs for the first time in 13 years, by an average of $1.
Despite the price increases, Spotify managed to add seven million net subscribers this quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify users show the least tendency to cancel their memberships compared to other audio or video streaming giants, according to a Bloomberg analysis.
However, the company’s financial journey has not been without challenges. Spotify’s stock value dropped by more than two-thirds in 2022 amid multiple quarters of operating losses. In January 2023, Spotify announced layoffs of 600 employees, and less than a year later, it cut an additional 1,500 jobs, equating to around 17% of its workforce.