Spotify has reported another quarter of record profits, marking a significant turnaround since it raised its Premium subscription prices for the first time last year.
The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) for the second quarter, a dramatic improvement compared to a loss of 247 million euros ($268 million) during the same period a year earlier. Monthly active users also saw a 14% year-over-year growth, reaching 626 million.
“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,” said CEO Daniel Ek. He noted that the company’s progress has exceeded even its own expectations, painting a positive outlook for the future.
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in subscription prices for its Premium users in the U.S. Effective this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will experience a $3 increase, bringing their total to $20. This marks the first price hike in 13 years for the Swedish company, which implemented an average increase of $1 last July.
Notably, despite these price increases, Spotify successfully gained seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Spotify continues to be the leading audio streaming service globally, with users showing a lower tendency to cancel memberships compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial health has faced challenges in the past. Spotify’s stock lost more than two-thirds of its value in 2022 due to multiple quarters of operating losses. In January 2023, the company announced a workforce reduction of 600 employees, followed by a larger cut of 1,500 jobs, representing approximately 17% of its total staff, less than a year later.