Spotify has announced another quarter of record profits, marking a significant turnaround since the company raised its Premium plan prices for the first time last year.
The Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million) in the second quarter, in stark contrast to a loss of 247 million euros ($268 million) during the same period last year. The company also saw its monthly active users grow by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We keep innovating and proving that we are not only a great product but also an increasingly successful business,” CEO Daniel Ek stated. “Our progress has exceeded even our own expectations, leading to a promising outlook for the future.”
Following the release of its earnings report, Spotify’s stock experienced a boost, rising nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium services in the U.S. starting this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more to reach $17, and Family plan users will pay $3 more, making it $20. This price change comes after the company raised membership prices for the first time in 13 years by an average of $1 in July 2022.
Despite these hikes, Spotify successfully added seven million net subscribers in the recent quarter, surpassing its own projections by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are the least likely to cancel their subscriptions compared to other audio or video streaming services.
However, the company has faced challenges in the past, as its stock lost over two-thirds of its value in 2022 amidst several quarters of operating losses. In early 2023, Spotify announced job cuts, eliminating 600 positions, and less than a year later, reduced its workforce by an additional 1,500 employees, which accounted for about 17% of its total staff.