Spotify has announced another record profit quarter, marking a significant turnaround one year after it raised the prices for its Premium plans for the first time ever.
For the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros ($289 million), in stark contrast to a loss of 247 million euros ($268 million) the previous year. Additionally, the platform’s monthly active users surged by 14% year-over-year, bringing the total to 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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 rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users, effective this month. Individual plans will see a $1 increase to $12, Duo plans will increase by $2 to $17, and Family plans will go up by $3 to $20. This move followed an average price hike of $1 last July, which was the first in 13 years.
Despite the increases, Spotify managed to gain seven million net subscribers during the past quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with its users showing the least tendency to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company faced significant challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds after several quarters of operating losses. In January 2023, the company announced a reduction of 600 employees, followed by a further cut of 1,500 jobs, representing about 17% of its workforce, less than a year later.