Spotify has announced record profits for another quarter, marking a significant turnaround since it increased the prices of its Premium subscriptions for the first time 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 a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also surged by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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 positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium customers in the U.S., effective this month. Individual subscribers will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will cost $3 more, totaling $20. This price hike was the first change in membership costs in thirteen years, which previously averaged a $1 increase.
Despite these price adjustments, Spotify successfully added seven million net subscribers in the quarter, exceeding its previous forecast by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with its users being the least likely to cancel their subscriptions compared to other streaming platforms.
However, Spotify’s financial history has seen challenges. The company’s stock value plummeted by over two-thirds in 2022 due to multiple quarters of operating losses. In January 2023, Spotify announced the layoff of 600 employees, followed by a further reduction of 1,500 jobs—approximately 17% of its workforce—less than a year later.