Spotify has announced another record quarter of profits, marking a significant turnaround one year after it implemented its first price increase for Premium plans.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) in the second quarter, a stark improvement from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also saw an annual growth of 14%, reaching 626 million.
“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,” said CEO Daniel Ek in a statement. “We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the announcement of its stronger-than-anticipated earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed it would be increasing prices for its Premium services in the U.S. Starting this month, individuals on Premium plans will pay an additional $1 (totaling $12), while Duo plans will see a $2 increase (totaling $17), and Family plans will increase by $3 (totaling $20). Last July marked the first price adjustment in 13 years, with an average rise of $1.
Despite these price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its prior guidance by one million.
As the leading audio streaming service globally, Spotify has demonstrated a lower cancellation rate among its users compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been positive. The company witnessed a drop of over two-thirds in its stock value in 2022 due to multiple quarters of operating losses. In January 2023, Spotify announced layoffs of 600 employees, and less than a year later, it reduced its workforce by another 1,500 positions, representing around 17% of its staff.