Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the prices of its Premium plans for the first time last year.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) in the second quarter, a remarkable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% increase in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed optimism 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 positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for Premium users in the U.S., which began this month. Individual plan users will see their fees rise by $1 to $12, Duo plan users will pay an additional $2 for a total of $17, and Family plan users will see a $3 increase to $20. This was the first price increase in 13 years, with an average hike of $1 implemented in July 2022.
Despite these price hikes, Spotify successfully added seven million net subscribers in this quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with data indicating its users are less likely to cancel subscriptions compared to those of other audio or video streaming services, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past, with its stock losing over two-thirds of its value in 2022 due to several quarters of operating losses. Earlier this year, Spotify announced a reduction of 600 employees, followed by another layoff of 1,500 jobs, representing about 17% of its workforce.