Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the price of its Premium plans for the first time last year.
In the second quarter, the Swedish audio streaming platform generated an operating income of 266 million euros ($289 million), a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the number of monthly active users 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 release of its favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users. As of this month, individuals on individual plans will see a $1 increase to $12, those on Duo plans will pay $2 more at $17, and Family plan users will face a $3 increase to $20. This price hike followed the company’s first increase in membership costs in 13 years, which averaged $1.
Despite the price increases, Spotify successfully added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
According to a Bloomberg analysis, Spotify remains the world’s leading audio streaming service, with its users being less likely to cancel their subscriptions compared to other streaming platforms.
However, the company’s financial performance has not always been strong, as Spotify’s stock lost more than two-thirds of its value in 2022 amid several quarters of operating losses. In early 2023, Spotify announced the layoffs of 600 employees, followed by another round of cuts affecting 1,500 jobs, which accounts for approximately 17% of its workforce.