Spotify has announced another quarter of record profits, marking a significant turnaround one year after the company raised its Premium plan prices for the first time.
In the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a notable improvement from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users surged by 14% year-on-year, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only offering a great product but also building a strong business,” said CEO Daniel Ek in a statement. “Our progress has surpassed even our own expectations, which is promising for the future.”
Following the favorable earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for its Premium subscribers in the U.S. Starting this month, individual plan users will see a $1 increase, bringing the cost to $12, while Duo plan users will now pay $2 more at $17, and Family plan users will face a $3 increase to $20. This price adjustment follows an average $1 increase in membership costs implemented last July—the first in 13 years.
Despite these price hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming platform globally, Spotify has shown strong customer retention, with users being the least likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the company has faced challenges in the past. In 2022, Spotify’s stock lost over two-thirds of its value due to several quarters of operating losses. In response, the company announced plans to lay off 600 employees in January 2023, followed by a further 1,500 job cuts, which accounted for approximately 17% of its workforce.