Spotify has reported another quarter of record profits, marking a significant turnaround just a year after it implemented its first ever price increase for Premium subscriptions.
In the second quarter, the Swedish audio streaming giant posted an operating income of 266 million euros ($289 million), a remarkable recovery from a loss of 247 million euros ($268 million) the previous year. Additionally, the number of monthly active users surged by 14% year-over-year to reach 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. “We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the optimistic earnings report, Spotify’s stock price jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced plans to raise its Premium subscription prices in the U.S. Starting this month, individuals will see a $1 increase to $12, those on Duo plans will pay $2 more for a total of $17, and Family plan users will pay $3 more, bringing their monthly total to $20. This increase comes after last July’s adjustment that saw membership prices rise for the first time in 13 years by an average of $1.
Despite the recent price hikes, Spotify managed to add seven million net subscribers in the quarter, outpacing its previous expectations by one million.
As the leading audio streaming service globally, Spotify boasts a user base that is the least likely to cancel subscriptions compared to competitors in the audio and video streaming industry, according to a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock value plummeted by more than two-thirds amid several quarters of operational losses. In January 2023, Spotify began a restructuring process that involved laying off 600 employees, followed by an additional 1,500 job cuts, which represented around 17% of its workforce.