Spotify has reported a record profit for another quarter, marking a year since it raised its Premium plan prices for the first time ever.
The Swedish audio streaming service achieved an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the company saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s direction, 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 strong earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium subscription plans in the U.S. Starting this month, individuals will pay $12 (an increase of $1), Duo plans for two people will cost $17 (up by $2), and Family plans will rise to $20 (a $3 increase). These price hikes follow an average increase of $1 last July, which was the first adjustment in 13 years.
Despite the higher costs, Spotify added seven million net subscribers in the recent quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis highlighting that its users are the least likely among streaming services to cancel their subscriptions. However, the company’s financial history has not always been positive. In 2022, Spotify’s stock value plummeted by more than two-thirds, and the company grappled with multiple quarters of operating losses. In early 2023, Spotify announced layoffs of 600 employees, and less than a year later, it reduced its workforce by an additional 1,500 positions, amounting to approximately 17% of its staff.