Spotify has announced another record profit in its latest quarterly report, marking a significant turnaround after raising the prices of its Premium plans for the first time in history last year.
The Swedish audio streaming company 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) from the same period last year. Additionally, the number of monthly active users surged by 14% 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.”
In response to the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium subscriptions in the U.S. Starting this month, individual plan users will pay an additional $1, bringing the total to $12, while Duo plan users will see a $2 increase to $17, and Family plan users’ costs will rise by $3, now totaling $20. This change marks the first membership cost increase in 13 years, with a previous average increase of $1 implemented last July.
Despite these price hikes, Spotify successfully gained seven million net subscribers during the quarter, surpassing prior guidance by one million.
As the world’s leading audio streaming service, Spotify boasts a loyal user base that is reportedly the least likely among streaming platforms to cancel memberships, according to a Bloomberg analysis.
However, Spotify’s financial trajectory has not always been positive. In 2022, the company saw its stock price plummet over two-thirds due to several quarters of operating losses. In January 2023, Spotify announced the layoff of 600 employees, followed by another reduction of about 1,500 jobs, which equated to roughly 17% of its workforce, less than a year later.