Spotify has announced another record profit quarter, marking a significant turnaround after it increased the price of its Premium plans for the first time last year.
The Swedish audio streaming platform achieved an operating income of 266 million euros ($289 million) in the second quarter, a sharp contrast to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek stated, “It’s an exciting time at Spotify. We keep on innovating and demonstrating that we aren’t just a great product, but increasingly also a great business. We are exceeding even our own expectations, which bodes 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 it would increase its Premium subscription prices in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more for a total of $17, and Family plan costs will rise by $3 to $20. Last July marked the first price hike in 13 years, averaging $1.
Despite these price adjustments, Spotify managed to add seven million net subscribers in the latest quarter, surpassing its previous forecast by one million.
As the world’s leading audio streaming service, Spotify users are notably the least likely to cancel their subscriptions compared to users of other audio and video streaming services, according to a Bloomberg analysis.
However, Spotify has faced challenges in the past. In 2022, the company’s stock lost more than two-thirds of its value amid several quarters of operating losses. In January 2023, Spotify announced it would cut 600 jobs, and less than a year later, it laid off approximately 1,500 employees, accounting for about 17% of its workforce.