Spotify has reported another quarter of record profits, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year.
The Swedish audio streaming platform announced an operating income of 266 million euros (approximately $289 million) for the second quarter, contrasting with a loss of 247 million euros (around $268 million) in the same period last year. The company also saw a 14% annual increase in monthly active users, reaching a total of 626 million.
“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,” said CEO Daniel Ek in a statement. He noted that the company’s progress has exceeded even their own expectations, which bodes well for the future.
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in Premium subscription prices in the U.S. Effective 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 experience a $3 rise to $20. This pricing adjustment follows an average increase of $1 in membership costs announced last July, the first change in 13 years.
Despite the price hikes, Spotify was able to add seven million net subscribers during the quarter, surpassing its prior expectations by one million.
As the world’s leading audio streaming service, Spotify also enjoys a reputation for having users who are the least likely to cancel their memberships, according to a Bloomberg analysis.
However, Spotify’s financial journey hasn’t always been smooth. In 2022, the company’s stock plummeted by more than two-thirds after experiencing multiple quarters of operating losses. In early 2023, Spotify initiated layoffs that affected 600 employees, and less than a year later, the company reduced its workforce by 1,500 jobs, equating to about 17% of its total staff.