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 remarkable recovery from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the platform saw its monthly active users increase by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s direction, 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, the company announced a price hike for U.S. Premium users, which took effect this month. Individual plan users will now pay $12, an increase of $1; Duo plan users will see their costs rise to $17, up $2; and Family plan users will pay $20, an increase of $3. This was the first price adjustment in 13 years, with an average increase of $1 implemented last July.
Despite the price increases, Spotify added seven million net subscribers in the latest quarter, exceeding its own forecast by one million.
Ranked as the most popular audio streaming service globally, Spotify’s users have shown resilience against canceling subscriptions, according to a Bloomberg analysis. However, the company faced challenges in the past, experiencing significant stock value loss in 2022 along with multiple quarters of operating losses. In early 2023, the company announced job cuts affecting 600 employees, followed by another round that laid off 1,500 workers, which accounted for approximately 17% of its workforce.