Spotify has reported another quarter of record profits, marking a significant turnaround following its first price hike for Premium plans last year.
The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) recorded in the same period last year. The number of monthly active users surged by 14% annually, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s growth, 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. This all bodes very well for the future.” Following the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S., effective this month. Individual plans will see an increase of $1 to $12, Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This was the first membership cost increase in 13 years, with an average hike of $1 implemented last July.
Despite the higher prices, Spotify gained seven million net subscribers this quarter, exceeding its previous projections by one million. A Bloomberg analysis indicates that Spotify remains the leading audio streaming service globally, with users less likely to cancel their memberships compared to those of other audio or video streaming providers.
However, Spotify has experienced financial difficulties in the past, suffering a loss of over two-thirds of its stock value in 2022 due to multiple quarters of operating losses. In January 2023, the company announced a workforce reduction of 600 employees, followed by a further cut of 1,500 jobs, representing about 17% of its staff, less than a year later.