Spotify has announced another record-breaking quarter of profits, marking a significant turnaround a year after it increased the prices of its Premium plans for the first time.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the platform saw a 14% increase in monthly active users, reaching a total of 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 achieving this faster than we initially anticipated, which bodes 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, the company announced a price hike for its Premium users in the United States. Starting this month, individual plan users will see a $1 increase, making it $12, while Duo plan prices will increase by $2 to $17, and Family plans will rise by $3 to $20. This was the first price adjustment in 13 years, with an average increase of $1 implemented last July.
Despite these price raises, Spotify managed to add seven million new subscribers in the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally, and research from Bloomberg indicates that its users are less likely to cancel their subscriptions compared to those of other audio and video streaming platforms.
However, the company’s financial performance has not always been positive. In 2022, Spotify’s stock plummeted by more than two-thirds due to multiple quarters of operating losses. In January 2023, the company announced plans to lay off 600 employees, followed by another round of layoffs in less than a year that affected approximately 1,500 jobs, or around 17% of its workforce.