Spotify has reported another quarter of record profits, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year.
The Swedish audio streaming platform announced an operating income of 266 million euros (approximately $289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) during the same period a year prior. The company also saw a 14% year-over-year increase in its monthly active user base, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and have proven that we are not only a great product but increasingly a strong business,” stated CEO Daniel Ek. “Our timing has surpassed even our own expectations, which is promising for the future.”
Following the release of this positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S., which took effect this month. Users on individual plans will see their monthly costs rise by $1 to $12, those on Duo plans will pay an additional $2 for a total of $17, and Family plan users will incur an extra $3, bringing the total to $20. The price raise last July was the first in 13 years and averaged an increase of $1.
Despite these increases, Spotify managed to add seven million net subscribers during the quarter, surpassing previous forecasts by one million.
As the leading audio streaming service globally, Spotify users are the least likely to cancel their memberships compared to other major audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial history has not always been strong. The company’s stock plummeted more than two-thirds in value throughout 2022, amid prolonged periods of operating losses. In January 2023, Spotify revealed plans to reduce its workforce by 600 employees, and within less than a year, it announced another cut of 1,500 jobs, equating to about 17% of its staff.