Spotify has announced another quarter of record profits, marking a notable turnaround since the company raised its Premium subscription prices for the first time last year. The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s current trajectory, 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 rose by nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium plans in the U.S. Starting this month, individual users will now pay $12, an increase of $1; Duo plan subscribers will pay $17, up $2; and Family plan users will see their costs rise to $20, an increase of $3. This decision came after the company raised membership costs for the first time in 13 years by an average of $1 in July.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous guidance by one million. A recent Bloomberg analysis noted that Spotify remains the leading audio streaming platform globally, with its users being the least likely to cancel their subscriptions compared to other audio and video streaming services.
However, Spotify’s financial health has not always been robust. The company experienced a steep decline in its stock value in 2022, losing over two-thirds of its worth as it faced several quarters of operating losses. In early 2023, Spotify announced a workforce reduction of 600 employees, followed by another cut of 1,500 jobs, amounting to roughly 17% of its staff.