Spotify has reported record profits for another quarter, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year.
The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) in the second quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period the previous year. Additionally, the platform’s monthly active users increased 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 positive earnings report, Spotify’s stock surged nearly 14% 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 subscribers will see an increase of $1 (now $12), Duo plan subscribers will pay $2 more ($17), and Family plan users will incur an additional $3 charge ($20). This followed a previous rise in membership costs last July, the first in 13 years, averaging an increase of $1.
Despite these price adjustments, Spotify managed to gain seven million net subscribers in the quarter, exceeding its earlier projections by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are among the least likely to cancel their subscriptions compared to other audio and video streaming platforms.
However, the company has faced challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds as it endured multiple quarters of operating losses. In January 2023, the company announced a layoff of 600 employees, followed by a further reduction of 1,500 jobs, representing approximately 17% of its workforce less than a year later.