Spotify has announced record profits for the second quarter, marking a significant turnaround since it raised the prices 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), contrasting with a loss of 247 million euros ($268 million) in the same period last year. The company also saw a 14% annual increase in monthly active users, reaching 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 earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
Earlier this month, the company implemented price increases for its U.S. Premium users. Individual plans will now cost $12, an increase of $1, while Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This marks the first price hike in 13 years, following last July’s average increase of $1.
Despite the price hikes, Spotify managed to gain seven million net subscribers in the quarter, surpassing its previous forecasts by one million.
As the leading audio streaming platform globally, Spotify’s users are the least likely among streaming services to cancel their subscriptions, according to a Bloomberg analysis. However, the company has faced challenges in the past; in 2022, Spotify’s stock dropped more than two-thirds of its value amid several quarters of operational losses. The company announced layoffs of 600 employees in January 2023 and cut an additional 1,500 jobs, or approximately 17% of its workforce, less than a year later.