Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the price of its Premium plans for the first time last year.
The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) for the second quarter, in contrast to a loss of 247 million euros ($268 million) during the same period last year. Additionally, Spotify saw a 14% year-over-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s performance, 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 rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S., which took effect this month. Individual plan users will now pay $12, an increase of $1; Duo plan users will now pay $17, an increase of $2; and Family plan users will pay $20, up by $3. This price hike followed a previous increase last July, the first in 13 years.
Notably, despite these price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with an analysis revealing that its users are the least likely to cancel their memberships compared to other audio and video streaming platforms.
However, Spotify’s financial history has been rocky. The company’s stock loss exceeded two-thirds of its value in 2022 as it faced multiple quarters of operating losses. In early 2023, Spotify announced layoffs of 600 employees, followed by an additional 1,500 job cuts, representing about 17% of its workforce.