Spotify has reported record profits for another quarter, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year. The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about 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.”
Spotify’s stock surged nearly 14% in pre-market trading on Tuesday following the favorable earnings report.
In June, Spotify announced price hikes for Premium users in the U.S. Effective this month, individual plan users will pay $12, an increase of $1, while Duo plan users will see a $2 increase to $17. Family plan users will experience a $3 increase, bringing their total to $20. This price adjustment came a year after the first increase in 13 years averaged $1.
Despite the price increases, Spotify added seven million net subscribers during the quarter, exceeding its expectations by one million.
As the leading audio streaming platform globally, Spotify’s users are the least likely to cancel their memberships, according to a Bloomberg analysis. However, the company has experienced financial struggles in the past, with its stock losing over two-thirds of its value in 2022 due to consecutive quarters of operational losses. Earlier this year, Spotify announced a reduction of 600 jobs and later cut another 1,500 positions, representing about 17% of its workforce.