Spotify has announced another record profit quarter, marking a significant turnaround since raising the prices of its Premium plans for the first time in history last year.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a stark contrast to the 247 million euro ($268 million) loss recorded in the same period last year. The company’s monthly active users have also surged, increasing by 14% year-over-year to reach 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not just a great product but also evolving into a great business,” said CEO Daniel Ek in a statement. He added that the company’s performance has surpassed even their expectations, suggesting a promising outlook for the future.
Following the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed it was increasing prices for its U.S. Premium subscribers, effective this month. Individual plan users will see a $1 increase, bringing their monthly fees to $12, while Duo plan users will pay an additional $2, totaling $17, and Family plan users will pay an extra $3, amounting to $20. This price adjustment follows a rise in membership costs last July, the first such increase in 13 years, which averaged $1.
Despite these higher prices, Spotify managed to add seven million net subscribers in the last quarter, exceeding its previous expectations by one million.
As the leading audio streaming platform globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to competitors in audio and video streaming, according to a Bloomberg analysis.
However, the company has faced challenges in the past. Spotify’s stock plummeted by more than two-thirds in 2022 amid several quarters of operating losses. Early this year, the company announced a reduction of 600 jobs, and within less than a year, it cut an additional 1,500 positions, representing about 17% of its workforce.