Spotify has reported record profits for another quarter, marking a significant turnaround since it raised the price of its Premium subscription plans for the first time in history last year.
The Swedish audio streaming service posted an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The company also experienced a 14% annual growth in monthly active users, 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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting this month, individual plan users will see their monthly fee rise by $1 to $12, while Duo plans will increase by $2 to $17, and Family plans will go up by $3 to $20. This price adjustment follows a previous hike last July, which was the first after 13 years and saw an average increase of $1.
Despite these price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its earlier forecast by one million.
Spotify remains the leading audio streaming service globally, and a Bloomberg analysis indicated that its users are less likely to cancel their subscriptions compared to those of other audio or video streaming platforms.
However, it hasn’t always been smooth sailing for Spotify financially. The company’s stock plummeted more than two-thirds in value in 2022 amid several quarters of operating losses. In January 2023, Spotify announced layoffs affecting 600 employees, and less than a year later, another 1,500 jobs were cut, representing about 17% of its workforce.