Spotify has announced another record profit quarter, marking a significant turnaround since it increased the price of its Premium plans for the first time last year.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement from a loss of 247 million euros ($268 million) during the same period last year. The platform also saw its monthly active users rise by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s progress, 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. This all bodes very well for the future.” Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S. Effective this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan rates will rise by $3 to $20. This pricing adjustment follows an average membership cost increase of $1 the previous July, the first increase in 13 years.
In spite of the higher prices, Spotify managed to add seven million net subscribers in the latest quarter, exceeding its prior estimates by one million. A Bloomberg analysis highlighted Spotify’s dominance as the most popular audio streaming service worldwide, revealing that its users are less likely to cancel their subscriptions compared to other platforms.
However, Spotify’s path has not always been smooth, with its stock losing over two-thirds of its value in 2022 due to several quarters of operating losses. The company announced layoffs of 600 employees in January 2023 and significantly expanded this move by cutting an additional 1,500 jobs later in the year, equating to roughly 17% of its workforce.