Spotify has announced another quarter of record profits, marking a significant turnaround one year after the first-ever increase in its Premium subscription prices.
The Swedish audio streaming giant reported 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 also saw a notable increase, growing by 14% year-over-year to reach 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we’re not just a leading product, but increasingly also a successful business,” stated CEO Daniel Ek. “Our progress surpasses even our own expectations, which bodes well for our future.”
Following the announcement of better-than-anticipated earnings, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed plans to raise its Premium subscription prices in the U.S. Starting this month, individual plan users will pay $12, an increase of $1; Duo plan users will now pay $17, up by $2; and Family plan users will pay $20, an increase of $3. This price hike followed a similar increase last July, which was the first in 13 years, raising average membership costs by about $1.
Despite these increases, Spotify managed to gain seven million net subscribers in the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are the least likely to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company has faced challenges in the past. Spotify’s stock value plummeted by over two-thirds in 2022 as it weathered several quarters of operating losses. In early 2023, the company announced a reduction of 600 jobs, and less than a year later, it cut an additional 1,500 positions, roughly 17% of its workforce.