Spotify has announced another record profit quarter, marking a significant turnaround since it raised the price of its Premium subscriptions for the first time ever a year ago.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% annual increase in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we’re not only a great product but also a great business,” said CEO Daniel Ek. “This progress is ahead of our own expectations and is promising for the future.”
Following the favorable earnings report, Spotify saw its stock rise nearly 14% in pre-market trading on Tuesday.
In June of this year, Spotify announced price increases for Premium users in the U.S. Starting this month, individual plan users will pay $1 more, bringing their total to $12. Duo plans (for two people) increased by $2 to $17, while Family plans rose by $3 to $20. This marked the first price hike in 13 years, with an average increase of $1 last July.
Despite the price increases, Spotify managed to add seven million net subscribers in the last quarter, exceeding its guidance by one million.
As the leading audio streaming service globally, Spotify users are shown to be less likely to cancel their subscriptions compared to users of other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been positive. In 2022, the company’s stock lost more than two-thirds of its value amid several quarters of operating losses. In January 2023, Spotify announced significant layoffs of 600 employees, followed by another cut of 1,500 jobs, which represented about 17% of its workforce, less than a year later.