Spotify has reported another quarter of record profits, marking a significant turnaround after it raised the prices of its Premium plans for the first time in its history one year ago.
The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, in contrast to a loss of 247 million euros ($268 million) the previous year. The company saw its monthly active users increase by 14% year-over-year, reaching 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,” stated CEO Daniel Ek. “We are doing this on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the release of its better-than-expected earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium subscriptions in the U.S. starting this month. Individual plan users will now pay $12, which is an increase of $1, while Duo plans (for two people) will see a $2 increase to $17, and Family plans will rise by $3 to $20. This marks the first membership cost increase in 13 years, with an average rise of $1.
Despite these price adjustments, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous forecast by one million.
Identified as the leading audio streaming service globally, Spotify users are noted to be the least likely to cancel their memberships compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. The company’s stock plummeted by more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, Spotify announced the layoff of 600 employees, and less than a year later, it cut 1,500 jobs, accounting for roughly 17% of its workforce.