Spotify has announced another quarter of record profits, marking a significant turnaround since raising the price of its Premium plans for the first time a year ago.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a substantial improvement from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the number of monthly active users surged by 14% annually, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for 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. 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 saw nearly a 14% increase in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium services in the United States, effective this month. Individual plan users will now pay $12, up by $1, while Duo plan subscribers will see an increase of $2 to $17, and Family plan users will pay an additional $3, totalling $20. This price adjustment came a year after the company raised its membership costs for the first time in 13 years.
Despite the price increases, Spotify successfully added seven million net subscribers this quarter, exceeding its previous projections by one million.
As the world’s leading audio streaming platform, Spotify boasts that its users are the least likely to cancel their subscriptions, according to a Bloomberg analysis. However, the company has experienced financial difficulties in the past, with its stock losing over two-thirds of its value in 2022 due to multiple quarters of operating losses. In early 2023, Spotify announced it would lay off 600 employees, and less than a year later, it cut 1,500 jobs, amounting to approximately 17% of its workforce.