Spotify has announced a record quarter of profits, marking a significant turnaround since it raised the prices of its Premium subscription plans for the first time in history last year.
The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s growth, 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 Premium users in the U.S. Effective this month, individual plan users will see a $1 rise to $12, Duo plan users will pay $2 more for a total of $17, and Family plan subscribers will incur an additional $3, totaling $20. This increase followed an average price hike of $1 for membership costs last July, marking the first change in 13 years.
Despite the price hikes, Spotify added seven million net subscribers during the quarter, exceeding its previous estimates by one million.
Recent analyses indicate that Spotify remains the leading audio streaming service globally and has the lowest cancellation rates among major audio and video streaming platforms.
However, Spotify’s financial health has not always been strong. The company’s stock lost over 66% of its value in 2022 as it experienced multiple quarters of operating losses. In January 2023, Spotify announced a reduction of 600 jobs, and by early this year, the company had cut 1,500 positions, which accounts for about 17% of its workforce.