Spotify has reported record profits for another quarter, marking a significant turnaround since increasing the prices of its Premium plans for the first time last year. The Swedish audio streaming service announced 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 company also saw its monthly active users rise by 14% year-over-year, reaching 626 million.
CEO Daniel Ek shared his enthusiasm, 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 is progressing faster than anticipated, which bodes well for its future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscription plans in the U.S. Starting this month, individual plan users will see an increase of $1 to $12, duo plan users will pay an additional $2 for a total of $17, and family plan users will now pay $3 more for a new total of $20. This marked the first price adjustment in 13 years, when the company raised membership costs by an average of $1.
Despite these price hikes, Spotify managed to add seven million net subscribers during the quarter, surpassing its forecast by one million.
Spotify remains the leading audio streaming service globally, with users showing a lower tendency to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company’s financial history was not always positive. Spotify’s stock lost over two-thirds of its value in 2022 amid several quarters of operating losses. In January 2023, the company announced it would reduce its workforce by 600 employees, followed by a further reduction of 1,500 jobs, accounting for roughly 17% of its total staff.