Spotify has reported record profits for another quarter, marking a significant turnaround since the company raised its Premium plan prices for the first time last year.
In the second quarter, the Swedish audio streaming giant announced an operating income of 266 million euros ($289 million), a stark contrast to the loss of 247 million euros ($268 million) recorded during the same period last year. Monthly active users also saw substantial growth, increasing 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed optimism, 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.” He noted that the company’s progress has surpassed even its own expectations, which bodes well for the future.
Following the impressive 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, individual users will see their monthly fee rise by $1 to $12, while Duo plans will increase by $2 to $17, and Family plans will grow by $3 to $20. This increase followed a previous adjustment in July when the company raised prices for the first time in 13 years by an average of $1.
Despite these price hikes, Spotify added seven million net subscribers during the quarter, which was one million more than the company had previously anticipated.
As the leading audio streaming service globally, Spotify’s users display the highest retention rates among major audio and video streaming platforms, according to a Bloomberg analysis.
However, Spotify has faced tumultuous financial periods, with its stock losing over two-thirds of its value in 2022 due to several quarters of operating losses. In January 2023, the company disclosed plans to reduce its workforce by 600 employees, followed by a more significant cut of 1,500 jobs, amounting to approximately 17% of its total staff.