Spotify has announced a record profit for another quarter, marking a significant financial turnaround since it raised the prices of its Premium plans 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 substantial improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also rose by 14% year-over-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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S., which began this month. Individual plan users are now charged $12, up $1 from before; Duo plan users will now pay $17, an increase of $2; and Family plan users are facing a $3 hike to $20. This price adjustment followed a similar increase last July, marking the first rise in membership costs in 13 years.
Notably, despite these increases, Spotify managed to add seven million net subscribers this quarter, exceeding its previous expectations by one million.
Spotify continues to lead as the world’s most popular audio streaming platform, with users reportedly being the least inclined to cancel their memberships compared to other streaming services, according to a Bloomberg analysis.
However, the company’s financial trajectory has not always been positive. In 2022, Spotify’s stock fell over two-thirds in value, struggling through multiple quarters of operating losses. Earlier this year, the company disclosed plans to reduce its workforce by 600 employees, and less than a year later, it laid off 1,500 staff members, representing roughly 17% of its total workforce.