Spotify has announced another quarter of record profits, marking a significant turnaround just a year after the company increased the prices of its Premium plans for the first time in its history.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a remarkable improvement from a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users surged by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only a great product but increasingly a great business,” stated CEO Daniel Ek. He added that the company’s progress has exceeded its own expectations, which is promising for future growth.
Following the robust earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium services in the U.S. Beginning this month, individual plan subscribers will see a $1 increase to $12, while the Duo plan will rise by $2 to $17, and Family plans will increase by $3 to $20. Last July marked the first price increase in 13 years, averaging an additional $1 for memberships.
Despite these price hikes, Spotify welcomed seven million net new subscribers in the quarter, surpassing its prior expectations by one million.
Recognized as the leading audio streaming service globally, Spotify users are noted to be the least likely among major audio and video streaming platforms to cancel their subscriptions, as highlighted in a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. The company’s stock value plummeted by more than two-thirds in 2022 due to several quarters of operational losses. In early 2023, Spotify announced layoffs affecting 600 employees, followed by another round of job cuts shortly after that impacted 1,500 staff, constituting about 17% of its workforce.