Spotify has announced another quarter of record profits, marking a significant turnaround since the company raised the prices of its Premium plans for the first time last year.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) recorded during the same period last year. The number of monthly active users also increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced it would be increasing subscription prices for its Premium users in the U.S. Starting this month, individual plans will see a price rise of $1 to $12, Duo plans will increase by $2 to $17, and Family plans will go up by $3 to $20. This price adjustment came after the company raised membership costs for the first time in 13 years by an average of $1 in July 2022.
Despite these price hikes, Spotify successfully gained seven million net subscribers in the latest quarter, surpassing its previous guidance by one million.
Spotify continues to be the most popular audio streaming service globally, and a Bloomberg analysis revealed that its users are the least likely to cancel their memberships compared to other audio or video streaming platforms.
However, the company has faced challenges in recent years. Spotify’s stock lost more than two-thirds of its value in 2022, following several quarters of operating losses. In January 2023, the company announced a workforce reduction of 600 employees, and less than a year later, it laid off another 1,500 staff members, which constitutes approximately 17% of its workforce.