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) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period the previous year. Monthly active users saw a 14% increase year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for the company’s developments, 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. This all bodes very well for the future.”
Following the positive earnings announcement, Spotify shares surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed plans to increase prices for its Premium offerings in the U.S. Starting this month, individual plan users will see their costs rise by $1 to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will face a $3 increase, raising their cost to $20. This marked the first membership cost increase in 13 years, with last July’s adjustments averaging $1.
Despite these price hikes, the company successfully gained seven million net subscribers in the quarter, surpassing its prior expectations by one million.
According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with users less likely to cancel their subscriptions compared to other audio or video streaming platforms.
However, the financial outlook wasn’t always positive. In 2022, Spotify’s stock plummeted by more than two-thirds as the company wrestled with multiple quarters of operating losses. Earlier this year in January, Spotify announced the layoffs of 600 employees, followed by another cut of 1,500 jobs, which amounted to roughly 17% of its workforce.