Spotify has announced yet another quarter of record profits, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) from a year prior. Monthly active users also surged by 14% year-over-year, reaching a total of 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only a remarkable product but also an increasingly successful business,” said CEO Daniel Ek in a statement. He added that their progress has surpassed even their own expectations, indicating a positive outlook for the future.
Following the release of its favorable earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S., effective this month. Individual plan subscribers will see a $1 increase to $12, Duo plan subscribers will pay $2 more for a total of $17, and Family plan users will incur a $3 hike, bringing their costs to $20. This marked the first increase in membership fees in 13 years, averaging around $1.
Despite the price hikes, Spotify welcomed seven million new net subscribers in the quarter, exceeding its previous guidance by one million.
As the world’s leading audio streaming service, Spotify users exhibit the lowest cancellation rates compared to other audio and video platforms, according to a Bloomberg analysis.
However, Spotify’s financial situation has not always been stable. The company’s stock lost more than two-thirds of its value in 2022 due to multiple quarters of operating losses. In early 2023, Spotify announced plans to cut 600 jobs, followed by a larger reduction of 1,500 positions, or approximately 17% of its workforce, less than a year later.