Spotify has reported another quarter of record profits, marking a significant turnaround since it raised the price of its Premium plans for the first time last year.
The company announced an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement compared to a loss of 247 million euros ($268 million) in the same quarter last year. Monthly active users also saw an impressive 14% annual increase, bringing the total to 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 performance exceeding even its own expectations, suggesting a positive outlook for the future.
Following the release of its better-than-expected earnings report, Spotify shares surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users, effective this month. Users on individual plans will now pay $12, up by $1, Duo plans will cost $17 (up $2), and Family plans will rise to $20 (up $3). This follows an average price hike of $1 on membership costs that took place last July, the first increase in 13 years.
Despite the price hikes, Spotify successfully added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, and a Bloomberg analysis revealed that its users display the lowest likelihood of canceling their subscriptions compared to other streaming platforms.
However, Spotify’s financial journey has not always been stable. The company’s stock plummeted by more than two-thirds in 2022 amid several quarters of operational losses. In early 2023, Spotify announced layoffs affecting 600 employees, followed by another round of cuts a year later, reducing its workforce by approximately 17%, or 1,500 jobs.