Spotify has announced another quarter of record profits, marking a significant turnaround just a year after it raised the prices of its Premium plans for the first time in history.
The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a stark contrast to the 247 million euros ($268 million) loss recorded in the same period last year. Additionally, monthly active users surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s current 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 the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for Premium users in the U.S., effective this month. Individual plan users will see an increase of $1, bringing their bill to $12, while Duo plan subscribers will pay $2 more ($17), and Family plan users will incur a $3 increase ($20). This price adjustment comes after the first membership cost increase in 13 years, which took place last July.
Despite the price hikes, Spotify managed to add seven million net subscribers in the latest quarter, surpassing its previous guidance by one million.
As the most popular audio streaming platform globally, a Bloomberg analysis found that Spotify users are the least likely to cancel their subscriptions among audio and video streaming services. However, the company’s financial history has had its challenges, with Spotify stock falling over two-thirds of its value in 2022 amidst multiple quarters of operational losses. The company cut 600 jobs in January 2023 and a further 1,500 jobs, around 17% of its workforce, less than a year later.