Spotify has announced another quarter of record profits, marking a year since it first increased the prices of its Premium plans. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% annual growth in monthly active users, 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 a price increase for its Premium users in the U.S. starting this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more to a total of $17, and Family plan users will see a $3 hike to $20. Prior to this, last July marked the first price increase in 13 years, averaging $1.
Despite raising prices, Spotify successfully added seven million net subscribers in the quarter, exceeding its own guidance by one million.
Spotify remains the most popular audio streaming service globally, with users showing a lower tendency to cancel their memberships compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock lost over two-thirds of its value due to consecutive quarters of operating losses. In January 2023, the company announced the layoffs of 600 employees, followed by another round of job cuts affecting 1,500 staff, or about 17% of its workforce, less than a year later.