Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the price 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 stark improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The company also saw its monthly active users increase by 14% year-over-year to reach 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,” CEO Daniel Ek stated. He noted that the company’s progress has exceeded their expectations, indicating a promising outlook for the future.
Following the release of its positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed it would increase prices for Premium users in the United States. Starting this month, individual plan users will pay $1 more per month ($12), Duo plan users will see a $2 increase ($17), and Family plan users will incur a $3 increase ($20). This price hike was the first in 13 years, averaging $1 across memberships.
Despite these increases, Spotify successfully gained seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify has found that its users are less likely to cancel their subscriptions compared to those of other audio or video streaming services, according to a Bloomberg analysis.
However, the company has faced challenges in the past. Spotify’s stock value plummeted by more than two-thirds in 2022, with several quarters reporting operating losses. In early 2023, the company announced it would be laying off 600 employees and later made another significant cut of 1,500 jobs, approximately 17% of its workforce.