Spotify has announced another record quarter of profits, marking a significant turnaround a year after the platform increased the prices of its Premium subscriptions for the first time ever.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users rose by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed his enthusiasm in a statement, noting, “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 release of the earnings report, Spotify’s stock saw a nearly 14% increase in pre-market trading.
Last month, Spotify announced a price hike for its Premium users in the United States, which took effect this month. Individual plan subscribers will now pay $12—a $1 increase—while Duo plan users will pay $17, reflecting a $2 increase. Family plan subscribers will see their costs rise by $3, bringing the total to $20. Previous to this, the company had last raised membership costs in July 2022, marking the first increase in 13 years.
Despite the price increases, Spotify was able to add seven million net subscribers during the quarter, surpassing its prior expectations by one million.
As the leading audio streaming service globally, Spotify’s user base has been found to be the least likely among audio and video streaming platforms to cancel subscriptions, according to a Bloomberg analysis.
However, Spotify’s financial history includes challenges; in 2022, the company’s stock lost over two-thirds of its value amidst several quarters of operating losses. In early 2023, the company announced it would lay off 600 employees, followed by a further reduction of 1,500 jobs, or approximately 17% of its workforce, later that year.