Spotify has announced another record profit quarter, marking a significant turnaround since it implemented its first-ever price increase for Premium plans a year ago.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) in the second quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the company’s monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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 release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S. Effective this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more for a total of $17, and Family plan users will face a $3 rise to $20. This price adjustment followed a 13-year period without increases, which occurred last July when membership costs were raised by an average of $1.
Despite the higher prices, Spotify saw a net addition of seven million subscribers in the latest quarter, exceeding its earlier projections by one million.
As the world’s leading audio streaming service, Spotify users are reported to be the least likely to cancel their memberships compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company has faced challenges in the past; Spotify’s stock lost over two-thirds of its value in 2022 amid a series of operating losses. In January 2023, the company announced layoffs affecting 600 employees, followed by a major reduction in April, resulting in 1,500 job cuts, or about 17% of its workforce.