Spotify has announced another quarter of record profits, marking a significant turnaround for the company following its first price increase for Premium plans last year. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a substantial gain compared to a loss of 247 million euros ($268 million) during the same period last year. The platform also saw its monthly active users grow by 14%, 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 had announced a price increase for its U.S. Premium subscribers. Effective this month, individual plan users will pay $12, a $1 increase, while Duo plans will rise by $2 to $17 and Family plans will increase by $3 to $20. This price change marked the first adjustment to membership costs in 13 years.
Despite the increased prices, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million. A Bloomberg analysis noted that Spotify maintains the highest user retention rate among major audio and video streaming services.
However, the path has not always been smooth for the company, which saw its stock plummet by over two-thirds in 2022 due to several quarters of operating losses. In January 2023, Spotify announced cuts of 600 jobs, and less than a year later, it laid off another 1,500 employees, equating to around 17% of its workforce.