Spotify has reported another record profit quarter, marking a significant turnaround a year after it implemented its first-ever price increase for Premium subscriptions.
The Swedish audio streaming company posted an operating income of 266 million euros ($289 million) for the second quarter, in stark contrast to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users 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 aren’t just a fantastic product, but increasingly also a successful business,” said CEO Daniel Ek in a statement. “Our progress has exceeded even our own expectations, which is promising for the future.”
Following the announcement of its better-than-expected earnings, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, the company revealed that it would be raising prices for its U.S. Premium users, effective this month. Individual plan users will see an increase of $1 to $12, Duo plan subscribers will pay $2 more at $17, and Family plan users will be charged $3 extra, reaching $20. Last July marked the first increase in membership costs in 13 years, averaging $1.
Despite these hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with its subscribers less likely than those of any other audio or video streaming platform to cancel their memberships, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. Spotify’s stock saw a dramatic decline, losing over two-thirds of its value in 2022 due to several quarters of operating losses. In January 2023, Spotify announced plans to lay off 600 employees, followed by another round of cuts, totaling 1,500 jobs, which constitutes approximately 17% of its workforce less than a year later.