Spotify has announced 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 service reported an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement from the loss of 247 million euros ($268 million) during the same period the previous year. Monthly active users also saw an increase of 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, stating, “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. This all bodes very well for the future.”
Spotify’s stock surged nearly 14% in pre-market trading on Tuesday following the positive earnings report.
In June, Spotify announced an increase in prices for Premium users in the U.S. starting this month. Individual plan users will see a $1 increase to $12, while those on Duo plans will now pay $17, an increase of $2. Family plan users will pay $20, up by $3. The price adjustment came a year after the company raised membership costs for the first time in 13 years by an average of $1.
Despite the price hikes, Spotify added seven million net subscribers in the quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming platform globally, with a Bloomberg analysis showing that its users are less likely to cancel their subscriptions compared to those of other audio and video streaming services.
However, the company has faced challenges in the past. In 2022, Spotify’s stock lost over two-thirds of its value due to several quarters of operating losses. In early 2023, it announced a workforce reduction of 600 employees, followed by another layoff of 1,500 employees, which represented about 17% of its workforce.