Spotify has announced another quarter of record profits, marking a significant turnaround since the company first raised its Premium plan prices a year ago.
The Swedish audio streaming service reported an operating income of 266 million euros (about $289 million) in the second quarter, contrasting sharply with a loss of 247 million euros ($268 million) during the same period last year. Additionally, Spotify’s monthly active users have surged by 14% year-on-year to reach 626 million.
“It’s an exciting time at Spotify. We keep innovating and demonstrating that we are not just a great product, but also an increasingly successful business,” stated CEO Daniel Ek. He expressed optimism about the company’s future trajectory, noting that developments are exceeding their expectations.
In reaction to the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium plans in the U.S. Starting this month, individual plan users will now pay $12, an increase of $1, while Duo plans will rise by $2 to $17, and Family plans will see a $3 increase to $20. This marked the first membership price hike in 13 years, which occurred in July 2022, when prices were raised by an average of $1.
Despite the price hikes, Spotify has managed to add seven million net subscribers in the quarter, exceeding its previous forecasts by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming platform globally, with users less likely to cancel their subscriptions compared to other audio and video streaming services.
However, the company’s financial performance hasn’t always been robust. In 2022, Spotify’s stock plummeted by more than two-thirds due to several quarters of operating losses. The company announced layoffs of 600 employees in January 2023, followed by a further reduction of 1,500 jobs, approximately 17% of its workforce, less than a year later.