Spotify has announced another quarter of record profits, marking a notable turnaround since it raised the price of its Premium plans for the first time in its history one year ago.
The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) for the second quarter, up from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users increased by 14% year-over-year to reach 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 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 plans in the U.S., effective this month. Individual plan users will pay an additional $1, bringing their total to $12, while Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. Last July, the company raised membership costs for the first time in 13 years by an average of $1.
Despite the hikes, Spotify saw a net addition of seven million subscribers this quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with analysis from Bloomberg indicating that its users are the least likely among audio and video streaming platforms to cancel their subscriptions.
However, the company has faced financial challenges in the past. Spotify’s stock plummeted by over two-thirds in 2022 due to several quarters of operating losses. In January 2023, the company announced job cuts affecting 600 employees, and less than a year later, it laid off 1,500 staff members, which accounts for around 17% of its workforce.