Spotify has reported another record-setting quarter of profits, marking a significant milestone one year after it increased prices for its Premium plans for the first time.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a remarkable turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also saw its monthly active users rise by 14% year-over-year to reach 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,” said CEO Daniel Ek in a statement. “We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the release of its better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium subscribers in the United States. As of this month, users on individual plans will see an increase of $1, bringing their total to $12. Duo plans will now cost $17, up by $2, while Family plans have increased by $3 to a total of $20. This marked the first price hike in 13 years, with an average increase of $1 imposed last July.
Despite the price adjustments, Spotify successfully added seven million net subscribers during the quarter, exceeding its earlier expectations by one million.
As the leading audio streaming platform globally, Spotify has demonstrated that its users are less likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the company has faced challenges in the past. Spotify’s stock value plummeted by more than two-thirds in 2022, amid several quarters of operating losses. In January 2023, Spotify announced a reduction in its workforce, cutting 600 jobs, and less than a year later, it further laid off 1,500 employees, equating to approximately 17% of its total staff.