Spotify has announced another quarter of record profits, marking a significant recovery just one year after the company raised the prices of its Premium subscription plans for the first time.
In its latest financial report, the Swedish audio streaming service revealed an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) recorded during the same period last year. The platform’s monthly active users also saw a 14% increase 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.
In June, the company announced impending price hikes for its Premium users in the United States. As of this month, individual plan users will see an increase of $1 to $12, Duo plan users will pay an additional $2 for a total of $17, and Family plan subscribers will incur a $3 increase, bringing their total to $20. This marked the first membership cost increase for Spotify in 13 years, with an average rise of $1 implemented last July.
Despite these price adjustments, Spotify managed to gain seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify has been noted for its low membership cancellation rates compared to other streaming giants, according to a Bloomberg analysis. However, the company has faced significant financial challenges in recent years, with its stock losing more than two-thirds of its value in 2022 due to multiple quarters of operating losses. Earlier this year, Spotify announced plans to reduce its workforce by 600 employees, and less than a year later, it cut an additional 1,500 jobs, representing about 17% of its staff.