Spotify has reported a record profit for another quarter, marking a significant turnaround since it increased the price of its Premium plans for the first time last year.
The Swedish audio streaming company announced 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) during the same period last year. The number of monthly active users rose 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 only a great product but also a successful business,” CEO Daniel Ek stated. “Our progress has surpassed even our own expectations, which bodes well for the future.”
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday, reflecting investor optimism.
In June, the company announced new price increases for U.S. Premium subscribers, which took effect this month. Individual plan users will now pay $1 more monthly ($12), while Duo plan subscribers will see a $2 increase ($17), and Family plan users will pay $3 more ($20). This price hike followed a $1 increase last July, the first adjustment in membership costs in 13 years.
Despite the higher prices, Spotify attracted an additional seven million net subscribers in this quarter, exceeding its previous guidance by one million.
Spotify maintains its position as the leading audio streaming platform globally, with a Bloomberg analysis indicating that its users are the least likely among all audio and video streaming services to cancel their subscriptions.
However, Spotify’s journey has not been without hurdles. The company’s stock value plummeted by more than two-thirds in 2022, as it dealt with several quarters of operating losses. In January 2023, it announced a reduction of 600 employees, followed by a further cut of 1,500 jobs, amounting to approximately 17% of its workforce within less than a year.