Spotify has announced another quarter of record profits, marking a notable turnaround since it raised the price of its Premium plans for the first time a year ago.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, in stark contrast to a loss of 247 million euros ($268 million) in the same period last year. Monthly active users surged 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.”
Following the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for Premium users in the U.S. Effective this month, individual plan subscribers will see an increase of $1 to $12, Duo plan users will pay $2 more to $17, and Family plan subscribers will pay $3 more, totaling $20. This price adjustment came after the company raised membership costs for the first time in 13 years last July, which averaged a $1 increase.
Despite the price hikes, Spotify experienced a net addition of seven million subscribers during the quarter, which was one million more than previously anticipated.
As the leading audio streaming platform globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to other streaming giants, according to a Bloomberg analysis.
However, the company has faced significant challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds amid several quarters of operating losses, prompting the announcement of layoffs affecting 600 employees in January 2023. Less than a year later, the company further reduced its workforce by 1,500 jobs, or approximately 17% of its total staff.