Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the price of its Premium plans for the first time last year.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, in contrast to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the company saw a 14% year-over-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed excitement 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 release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S. Effective this month, individuals will pay $12 (up by $1), Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This move followed a similar price increase last July, which was the first in 13 years, averaging a $1 raise.
Despite these increases, Spotify managed to add seven million net subscribers in the last quarter, exceeding its earlier forecast by one million.
Spotify remains the leading audio streaming platform globally, with a Bloomberg analysis indicating that its users are the least likely to cancel their subscriptions compared to other audio or video streaming services.
However, the company has not always enjoyed robust financial performance. Spotify’s stock plummeted by over two-thirds in 2022 due to multiple quarters of operating losses. In January 2023, Spotify announced it would lay off 600 employees, and less than a year later, it reduced its workforce by an additional 1,500 jobs, approximately 17% of its total staff.