Spotify has announced another quarter of record profits, marking a significant turnaround following its first-ever price increase for Premium plans last year.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) in the second quarter, a remarkable recovery from a loss of 247 million euros ($268 million) in the same period last year. The company also saw a 14% year-over-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek shared his enthusiasm in a statement, 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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S., which took effect this month. Individuals will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will cost $3 more, totaling $20. This was the first membership cost hike in 13 years, following an average increase of $1 last July.
Despite the price hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are known to be the least likely to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial history has been turbulent. The company’s stock declined by more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, Spotify announced layoffs affecting 600 employees, and less than a year later, it reduced its workforce by 1,500, amounting to approximately 17% of its total staff.