Spotify has reported record profits for another quarter, marking a significant change since it raised 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), in contrast to a loss of 247 million euros ($268 million) during the same period last year. Additionally, Spotify’s monthly active users rose by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we’re not just a great product, but also a robust business,” stated CEO Daniel Ek. He noted that the company’s growth is occurring at a pace that has surpassed expectations, which is promising for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced it would increase prices for its Premium users in the U.S., implementing changes this month. Individual plans will now cost $12 (up by $1), Duo plans will rise to $17 (up by $2), and Family plans will be priced at $20 (up by $3). This price hike was the first in 13 years, averaging a $1 increase across memberships.
Despite these increases, Spotify saw its subscriber base grow by seven million net users in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming platform globally, Spotify’s users are also reportedly the least likely to cancel their subscriptions, according to a Bloomberg analysis.
However, the company’s financial history has not always been strong. In 2022, Spotify’s stock experienced a decline of over two-thirds in value amid multiple quarters of operating losses. Facing these challenges, the company announced plans in January 2023 to lay off 600 employees, and less than a year later, it reduced its workforce by another 1,500 jobs, amounting to approximately 17% of its staff.