Spotify has announced another record quarter of profits, marking a significant turnaround for the company after it increased its Premium plan prices 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 of this year, a notable recovery from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for the company’s progress, 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price increases for its Premium subscriptions in the U.S. Starting this month, individual plan users will see an increase of $1 to $12, Duo plan users will pay $2 more for $17, and Family plan users will pay $3 more, totaling $20. This marked the first membership cost increase in 13 years, previous changes averaging around $1.
Despite the price hikes, Spotify successfully added seven million net subscribers in the last quarter, surpassing its initial guidance by one million.
Spotify remains the leading audio streaming service worldwide, and a Bloomberg analysis indicates that its users are less likely to cancel their subscriptions compared to those of other major audio and video streaming services.
However, 2022 was a challenging year for the company, which saw more than two-thirds of its stock value diminish amidst several quarters of operational losses. In January 2023, Spotify revealed plans to lay off 600 employees, and less than a year later, it eliminated an additional 1,500 jobs, which accounts for about 17% of its workforce.