Spotify has announced another record profit quarter, marking a significant turnaround for the company one year after it increased the prices of its Premium subscription plans for the first time.
For the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a notable improvement from a loss of 247 million euros ($268 million) in the same period last year. The platform also experienced a 14% increase in monthly active users, reaching 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 expressed optimism about the company’s progress, emphasizing that it has exceeded expectations and is poised for a promising future.
Following the positive earnings report, Spotify’s stock surged nearly 14% during pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium services in the U.S. effective this month. Individual plan users will see their monthly fee rise by $1 to $12, Duo plan users will pay $2 more, totaling $17, and Family plan prices will increase by $3 to $20. This adjustment followed a $1 hike last July, marking the first price change in 13 years.
Amid these price increases, Spotify added seven million net subscribers in the quarter, exceeding its previous projections by one million.
As the leading audio streaming service globally, Spotify users are less likely to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis. However, the company has faced financial challenges in the past, with its stock price plummeting by more than two-thirds in 2022 due to several quarters of operating losses. The company also undertook significant layoffs, cutting 600 employees in January 2023 and an additional 1,500 jobs, representing about 17% of its workforce, within a year.