Spotify has announced another record quarter of 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) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. The company also saw its monthly active users rise by 14% year-over-year to reach 626 million.
“It’s an exciting time at Spotify. We keep innovating and showcasing that we aren’t just a great product, but increasingly a robust business,” stated CEO Daniel Ek. “Our progress has surpassed even our own expectations, which bodes well for the future.”
In response to the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium services in the U.S. Starting this month, individual plan users will see their fees rise by $1 to $12, while Duo plans will increase by $2 to $17, and Family plans will go up by $3 to $20. Last July marked the first price increase in 13 years, which averaged an additional $1 for subscribers.
Despite the price hikes, Spotify added seven million net subscribers in the quarter, exceeding its earlier guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely among major streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, Spotify’s financial performance has had its challenges. The company’s stock value dropped by over two-thirds in 2022, following several quarters of operating losses. In January 2023, Spotify revealed plans to reduce its workforce by 600 employees, and less than a year later, the company laid off another 1,500 employees, amounting to approximately 17% of its staff.