Spotify has reported another quarter of record profits, marking a significant turnaround one year after it increased the cost of its Premium plans for the first time. The Swedish audio streaming service achieved an operating income of 266 million euros ($289 million) in the second quarter, compared to a loss of 247 million euros ($268 million) in the same period last year. Monthly active users surged by 14% year-on-year, reaching 626 million.
“It’s an exciting time at Spotify. We keep innovating and demonstrating that we are not just a great product, but increasingly a great business,” stated CEO Daniel Ek. He added that the company’s growth has surpassed their expectations, which looks promising for the future.
After the release of the earnings report, Spotify’s stock saw a nearly 14% increase in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This marked the first price adjustment in 13 years, with rates raised by an average of $1 last July.
Despite these increases, Spotify added seven million net subscribers in the quarter, exceeding its previous guidance by one million.
Spotify continues to be the leading audio streaming platform globally, and a Bloomberg analysis found that its users are among the least likely to cancel their subscriptions compared to other streaming giants.
However, the company has not always enjoyed robust financials. In 2022, Spotify’s stock plummeted by more than two-thirds as it grappled with multiple quarters of operating losses. In January 2023, the company laid off 600 employees, followed by another round of job cuts that saw 1,500 positions eliminated, amounting to roughly 17% of its workforce.