Spotify has announced yet another quarter of record profits, marking a significant turnaround from previous financial struggles just one year after increasing the prices of its Premium plans for the first time.
In the second quarter, the Swedish audio streaming giant reported an operating income of 266 million euros ($289 million), a substantial rebound from a loss of 247 million euros ($268 million) recorded during the same period last year. The platform also saw a 14% year-over-year growth in monthly active users, reaching a total of 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 their own expectations, indicating a positive outlook for the future.
Following the announcement of its better-than-expected earnings, Spotify’s stock surged by nearly 14% in pre-market trading on Tuesday.
In June, Spotify had revealed plans to increase prices for its Premium users in the U.S. Starting this month, individual plan users will pay $12, an increase of $1, while Duo plan subscribers will pay $17, up by $2, and Family plan users will see their cost rise to $20, a $3 increase. This marked the first average membership cost hike in 13 years, with the last increase occurring in July 2022.
Despite these price hikes, Spotify successfully added seven million net subscribers in the recent quarter, exceeding its previous guidance by one million.
Spotify remains the world’s leading audio streaming service, with users being notably less likely than those of other audio or video platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, the company’s financial trajectory has not always been positive. In 2022, Spotify’s stock plummeted by over two-thirds as it dealt with multiple quarters of financial losses. Additionally, in early 2023, the company announced layoffs affecting 600 employees. Less than a year later, it cut 1,500 jobs, accounting for approximately 17% of its workforce.