Spotify has reported another record profit quarter, marking a significant turnaround after raising the prices of its Premium plans for the first time last year.
In the second quarter, the Swedish audio streaming company achieved an operating income of 266 million euros ($289 million), compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also surged, increasing by 14% year-over-year to reach 626 million.
“It’s an exciting time at Spotify. We continue to innovate, proving we are not just a great product but also an increasingly robust business,” said CEO Daniel Ek in a statement. “Our progress has exceeded even our own expectations, setting a promising tone for the future.”
Following the announcement of its better-than-expected earnings report, Spotify’s stock soared nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed plans to raise prices for its U.S. Premium users, which began this month. Individual plan users will see an increase of $1, bringing the total to $12, while Duo plans (for two users) will go up by $2 to $17, and Family plan users will pay $3 more, totaling $20. This was the first membership cost increase in 13 years, with an average hike of $1 implemented last July.
Despite these price hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous forecasts by one million.
As the leading audio streaming service globally, Spotify’s users are reportedly the least likely among all major streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, the company’s financial journey hasn’t always been smooth. In 2022, Spotify’s stock value dropped by more than two-thirds as it encountered multiple quarters of operating losses. In January 2023, the company announced layoffs of 600 employees, and less than a year later, it reduced its workforce by 1,500 jobs, amounting to approximately 17% of its staff.