Spotify has announced another quarter of record profits, marking a significant turnaround just one year after it implemented its first-ever price increase for Premium plans.
The Swedish audio streaming giant reported an operating income of 266 million euros (approximately $289 million) for the second quarter, in contrast to a loss of 247 million euros ($268 million) recorded during the same period last year. The company also witnessed a 14% rise in monthly active users, bringing the total to 626 million.
“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,” stated CEO Daniel Ek. He added that the company’s progress has surpassed even their own expectations, indicating a promising future ahead.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced an increase in prices for its Premium users in the U.S. Effective this month, individual plan subscribers will see an increase of $1 (to $12), Duo plan users will pay an additional $2 (bringing the total to $17), and Family plan subscribers will incur a $3 rise (to $20). This marked the first price hike in 13 years, which occurred last July with an average increase of $1.
Despite the price adjustments, Spotify successfully gained seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify’s users exhibit the lowest likelihood of canceling their memberships compared to other audio and video streaming platforms, as reported in a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock value plummeted by more than two-thirds amid several quarters of operating losses. In January 2023, the company announced a workforce reduction of 600 employees, followed by another cut of 1,500 jobs, amounting to roughly 17% of its staff less than a year later.