Spotify has announced another quarter of record profits, marking a significant change 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 sharp turnaround from a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s growth, 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 release of its positive earnings report, Spotify’s stock soared nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscription in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will pay $3 more, bringing the total to $20. These adjustments came after the company raised its membership prices for the first time in 13 years, with an average hike of $1 last July.
Despite the price increases, Spotify successfully added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the world’s leading audio streaming service, Spotify also boasts the highest retention rate among streaming platforms, according to a Bloomberg analysis.
However, the company’s financial journey hasn’t always been smooth. Spotify’s stock value plummeted by over two-thirds in 2022 due to several quarters of operational losses. In early 2023, the company announced the layoff of 600 employees, followed by additional cutbacks of 1,500 jobs—approximately 17% of its workforce—less than a year later.