Spotify has announced impressive record profits for the latest quarter, marking a significant turnaround since it raised the prices of its Premium plans for the first time in history a year ago.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a stark contrast to a loss of 247 million euros ($268 million) from the same period last year. The company has also seen a 14% year-over-year growth in monthly active users, reaching 626 million.
“This is an exciting time at Spotify. We continue to innovate and demonstrate that we are not just a compelling product but also a thriving business,” commented CEO Daniel Ek. “Our progress has surpassed even our own expectations, which bodes well for our future.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium users in the U.S. Beginning this month, individual plan subscribers will see their fees rise by $1 to $12, Duo plan users will now pay $2 more for a total of $17, and Family plan subscribers will see an increase of $3 to $20. This marks the first price hike in 13 years, where the average cost had increased by $1.
Despite the price adjustments, Spotify managed to gain seven million net new subscribers in the quarter, exceeding previous projections by one million.
As the leading audio streaming platform globally, Spotify users are less likely to cancel their subscriptions compared to members of other streaming services, according to a Bloomberg analysis. However, the company’s financial journey has not always been smooth; in 2022, Spotify’s stock plummeted more than two-thirds amid several quarters of operating losses. In January 2023, the company announced the layoff of 600 employees, and less than a year later, it reduced its workforce by 1,500 jobs, which accounts for approximately 17% of its staff.