Spotify has announced another quarter of record profits, marking a significant turnaround following its first-ever increase in Premium plan prices one year ago.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) for the same period last year. The company also saw a 14% increase in monthly active users, reaching 626 million.
“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,” said CEO Daniel Ek in a statement. “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 better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S. Starting this month, individual plan users will see their charges increase by $1 to a total of $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will pay $3 more, bringing their total to $20. This price adjustment comes after the company raised membership costs for the first time in 13 years by an average of $1 last July.
Despite these increases, Spotify managed to gain seven million net subscribers in the quarter, exceeding its earlier expectations by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with its users showing the lowest likelihood of canceling their subscriptions compared to other audio and video streaming platforms.
However, Spotify has had its share of financial struggles. In 2022, the company saw its stock value plummet by more than two-thirds, facing several quarters of operational losses. In January 2023, Spotify announced a reduction of 600 jobs, followed by another 1,500 job cuts, amounting to roughly 17% of its workforce, less than a year later.