Spotify has reported a record quarter of profits, marking a significant turnaround from losses just a year after it first raised the prices of its Premium plans.
The Swedish audio streaming service revealed an operating income of 266 million euros ($289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) in the same period last year. Additionally, the number of monthly active users increased by 14% year-on-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 rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting this month, individuals will pay an additional $1, raising the cost to $12, while Duo plans will see an increase of $2 to $17, and Family plans will rise by $3 to $20. This move came after the company raised membership prices for the first time in 13 years in July 2022, adding an average of $1 to existing plans.
Despite the price hikes, Spotify managed to add seven million net new subscribers during the quarter, surpassing its previous guidance by one million.
As the world’s most popular audio streaming service, Spotify boasts a user base that is less likely than any other audio or video streaming platform to cancel subscriptions, according to a Bloomberg analysis.
However, the company has faced challenges; its stock plummeted over two-thirds in 2022 amid several quarters of operating losses. In January 2023, Spotify announced plans to lay off 600 employees, followed by another 1,500 job cuts less than a year later, amounting to approximately 17% of its workforce.