Spotify has announced another record profit for the second quarter, marking a significant turnaround from the previous year after it raised the prices of its Premium subscriptions for the first time in history.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) recorded during the same quarter last year. The number of monthly active users increased by 14% year-on-year, reaching 626 million.
“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,” said CEO Daniel Ek in a statement. He added that the company is performing better than even its own expectations, which is promising for the future.
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S. Starting this month, individual plan subscribers will see a $1 increase, bringing the cost to $12. Duo plan users will pay $2 more ($17), and Family plan users will face a $3 increase ($20). This price adjustment followed the company’s first increase in 13 years last July, which averaged an additional $1.
Despite these price hikes, Spotify added seven million net subscribers during the quarter, exceeding its earlier forecasts by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis suggesting that its users are among the least likely to cancel their subscriptions compared to other audio or video streaming platforms.
However, the company has faced challenges in the past. In 2022, Spotify’s stock value plummeted by more than two-thirds as it navigated multiple quarters of operating losses. In January 2023, the company announced the layoff of 600 employees, followed by a further reduction of 1,500 jobs, representing around 17% of its workforce just months later.