Spotify has announced another quarter of record profits, marking a significant turnaround since the company raised its Premium plan prices for the first time last year. In the second quarter, the Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), a stark contrast to the loss of 247 million euros ($268 million) experienced a year prior. The company also saw a 14% year-over-year increase in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed optimism 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.”
Following this positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in Premium subscription prices in the U.S. Starting this month, individual plan users will see an increase of $1, bringing the total to $12, while Duo plan subscribers will pay $2 more for a total of $17, and Family plan users will face a $3 increase to $20. This move came after the company adjusted membership prices for the first time in 13 years last July, raising them by an average of $1.
Despite these price hikes, Spotify managed to add seven million net subscribers in the last quarter, exceeding its own expectations by one million.
As the leading audio streaming platform globally, Spotify’s users are reported to be the least likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis. However, the company has faced challenges in the past, including a significant drop in stock value in 2022, which saw it lose more than two-thirds of its worth. Earlier this year, Spotify announced layoffs affecting 600 employees, followed by another round of cuts that impacted 1,500 jobs, or about 17% of its workforce.