Spotify has reported another record profit quarter, marking a significant turnaround after raising the price of its Premium plans for the first time in its history a year ago.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the 247 million euros ($268 million) loss reported during the same quarter last year. Monthly active users also increased by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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 release of this positive earnings report, Spotify’s stock saw a nearly 14% increase in pre-market trading on Tuesday.
In June, the company announced price hikes for its U.S. Premium users, effective this month. Individual plan users will now pay $12, an increase of $1; Duo plan subscribers will pay $17, rising by $2; and Family plan users will now pay $20, an increase of $3. Prior to this, Spotify raised membership fees for the first time in 13 years by an average of $1 last July.
Despite these price increases, Spotify successfully gained seven million net subscribers in the quarter, exceeding its previous guidance by one million.
Analysis from Bloomberg indicates that Spotify remains the most popular audio streaming service globally, with its users boasting the lowest likelihood of canceling their subscriptions compared to other audio and video streaming platforms.
However, the company’s financial history hasn’t always been positive. In 2022, Spotify’s stock value plummeted by more than two-thirds due to several quarters of operational losses. In January 2023, Spotify announced the layoffs of 600 employees, and within a year, it further reduced its workforce by 1,500 jobs, or about 17% of its total staff.