Spotify has announced another quarter of record profits, marking a significant turnaround since it raised its Premium prices for the first time last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a notable improvement from a loss of 247 million euros ($268 million) during the same period last year. The platform’s monthly active users also saw a 14% increase annually, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s performance, 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 growth has surpassed even its own expectations, which bodes 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 offerings in the U.S., effective this month. Individual plan users will see a $1 increase to $12, Duo plan subscribers’ fees will rise by $2 to $17, and Family plan costs will go up by $3 to $20. This price adjustment followed the Swedish company’s first membership hike in 13 years, which occurred last July.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, exceeding its own forecast by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are less likely to cancel their memberships compared to other audio or video streaming platforms.
However, the company’s financial trajectory has not always been positive. In 2022, Spotify’s stock value plummeted by more than two-thirds amid consecutive quarters of operating losses. In early 2023, Spotify announced layoffs affecting 600 employees, and less than a year later, it reduced its workforce by an additional 1,500 jobs, representing about 17% of its total staff.