Spotify has reported another quarter of record profits, marking a significant turnaround since it raised prices for its Premium plans for the first time in history last year.
The Swedish audio streaming service announced an operating income of 266 million euros (approximately $289 million) for the second quarter, a notable increase compared to a loss of 247 million euros ($268 million) during the same time frame last year. The company’s monthly active users also surged, growing by 14% annually to reach 626 million.
“It’s an exciting time at Spotify. We keep innovating and demonstrating that we are not just a great product, but are increasingly becoming a great business,” said CEO Daniel Ek in a statement. “We are achieving this on a timeline that has surpassed even our own expectations, which indicates a promising future ahead.”
In response to the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for its Premium users in the U.S. Starting this month, individual plans will increase by $1 to $12, Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. Last July, Spotify implemented its first membership cost increase in 13 years, raising prices by an average of $1.
Despite these price hikes, Spotify successfully added seven million net subscribers in the latest quarter, exceeding its prior guidance by one million.
As the leading audio streaming platform globally, Spotify users have the lowest likelihood of canceling their memberships compared to other audio or video streaming services, according to a Bloomberg analysis.
However, the company’s financial health has not always been robust. Spotify’s stock saw a significant decline, losing more than two-thirds of its value throughout 2022 amid multiple quarters of operating losses. In January 2023, the company announced it would lay off 600 employees, and less than a year later, it made additional cuts affecting 1,500 jobs, or about 17% of its workforce.