Spotify has announced another quarter of record profits, marking a significant turnaround since it raised its Premium plan prices for the first time a year ago.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a sharp contrast to the loss of 247 million euros ($268 million) recorded during the same period last year. The number of monthly active users also rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the announcement of this better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify indicated that it would be increasing prices for Premium subscribers in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will now pay $2 more at $17, and Family plan users will incur a $3 increase to $20. Last July marked the first membership price hike in 13 years, averaging an additional $1.
Despite the raised prices, Spotify successfully added seven million net subscribers in the quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with users showing a lower likelihood of canceling their subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the company’s financial situation hasn’t always been positive. In 2022, Spotify’s stock value plummeted by more than two-thirds, and the company faced several quarters of operating losses. In January 2023, Spotify announced it would be laying off 600 employees, followed by another round of job cuts impacting 1,500 employees, approximately 17% of its workforce, less than a year later.