Spotify has announced another record profit quarter, marking a significant turnaround one year after it raised the prices of its Premium subscription plans for the first time ever. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a remarkable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed his excitement 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 the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in its Premium subscription prices in the U.S. Starting this month, individual plan users will see an increase of $1 to a total of $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will be charged an additional $3, bringing the total to $20. Last July, the company raised membership costs for the first time in 13 years by an average of $1.
Despite the price hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with a recent Bloomberg analysis indicating that its users are the least likely to cancel their subscriptions compared to other audio and video streaming platforms. However, the company’s financial history has seen challenges; in 2022, Spotify’s stock lost over two-thirds of its value as it faced multiple quarters of operating losses. Earlier this year, the company announced layoffs affecting 600 employees and, less than a year later, cut another 1,500 jobs, representing around 17% of its workforce.