Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year.
In the second quarter, the Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million), compared to a loss of 247 million euros (about $268 million) during the same period last year. Monthly active users also increased by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism, 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. 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.
The company raised its Premium subscription prices in June, resulting in an additional $1 charge for individual plans (now $12), a $2 increase for Duo plans (now $17), and a $3 rise for Family plans (now $20). Last July, Spotify implemented its first membership price increase in 13 years, averaging an additional $1.
Despite the price hikes, Spotify successfully added seven million net subscribers in the recent quarter, exceeding its previous forecast by one million. According to a Bloomberg analysis, Spotify is recognized as the most popular audio streaming service globally, with users showing a low propensity to cancel their memberships compared to other streaming platforms.
However, the company has faced significant challenges. In 2022, Spotify’s stock value plummeted by more than two-thirds as it recorded several quarters of operating losses. Earlier this year, the company announced plans to lay off 600 employees and subsequently cut 1,500 jobs, approximately 17% of its workforce.