Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the price of its Premium plans for the first time last year.
The Swedish audio streaming company reported an operating income of 266 million euros (approximately $289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) from the same period last year. Monthly active users have increased by 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’s ongoing innovation and success in transforming into a robust business, stating that the company’s progress has surpassed even its own expectations, indicating a positive outlook for the future.
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for its Premium users in the U.S. Beginning this month, users on individual plans will face a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will see a $3 increase to $20. This price hike was the first adjustment in membership costs in 13 years and occurred last July.
Despite these increases, Spotify added seven million net subscribers in the last quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis showing that its users are the least likely among major audio and video streaming platforms to cancel their memberships.
However, the company’s financial history has not been entirely smooth. Spotify’s stock lost over two-thirds of its value in 2022 amid consecutive quarters of operating losses. In January 2023, the company announced layoffs of 600 employees and later reduced its workforce by an additional 1,500 jobs, amounting to about 17% of its staff.