Spotify announced record profits for the past quarter, marking a significant turnaround since the company increased its Premium pricing for the first time last year.
In the second quarter, the Swedish audio streaming giant achieved an operating income of 266 million euros ($289 million), a stark improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users surged 14% year-over-year, reaching 626 million.
“This is an exciting time at Spotify. We continue to innovate and demonstrate that we are not only a strong product but also an increasingly successful business,” commented CEO Daniel Ek. He expressed optimism about the company’s growth trajectory, which has surpassed even their own expectations.
Following the positive earnings announcement, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, the company revealed an increase in prices for its Premium service in the U.S. Starting this month, individual plans will cost $12, up by $1; Duo plans will rise to $17, an increase of $2; and Family plans will now cost $20, or $3 more. This pricing adjustment followed last July’s first membership cost increase in 13 years, which averaged $1.
Despite these price hikes, Spotify successfully added 7 million net subscribers during the quarter, exceeding previous forecasts by one million.
Spotify remains the leading audio streaming platform globally, with users demonstrating a lower tendency to cancel subscriptions compared to competitors, according to a Bloomberg analysis.
However, the company has faced significant challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds due to several quarters of operational losses. Earlier this year, the firm announced the layoff of 600 employees and subsequently cut an additional 1,500 jobs, amounting to approximately 17% of its workforce.