Spotify has announced another quarter of record profits, marking a significant turnaround after it increased the prices of its Premium plans for the first time in history one year ago.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users surged by 14% year-over-year, 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 in a statement. “We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the announcement of its better-than-expected earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed that it would raise prices for its Premium users in the U.S. Beginning this month, individual plan subscribers will see a $1 increase, bringing their cost to $12, while Duo plan users will pay $2 more at $17, and Family plan subscribers will see a $3 increase to $20. This marked the first price hike in 13 years for the company, which had raised membership costs by an average of $1 last July.
Despite the price adjustments, Spotify managed to add seven million net subscribers during this quarter, surpassing its prior projections by one million.
As the leading audio streaming service worldwide, Spotify also boasts a strong retention rate, with users being the least likely among major audio or video streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, the company’s financial performance has not always been strong. In 2022, Spotify’s stock lost over two-thirds of its value due to several quarters of operating losses. In early 2023, the company announced the layoffs of 600 employees and subsequently cut 1,500 jobs, representing roughly 17% of its workforce.