Spotify has announced another record-breaking quarter of profits, marking a significant turnaround one year after it implemented its first-ever price increase for Premium subscriptions.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, recovering from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also surged 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 this positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for Premium users in the U.S. Effective this month, individual plan subscribers will see their fees rise by $1 to $12, while those on Duo plans will pay $2 more at $17 and Family plan users will pay $3 more at $20. This change follows a previous price hike last July, the first in 13 years, which averaged an additional $1.
Despite the price increases, Spotify successfully added seven million net subscribers in the last quarter, surpassing its previous guidance by one million.
As the leading audio streaming platform globally, Spotify users show a lower tendency to cancel their subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock plummeted by over two-thirds as the company dealt with multiple quarters of operating losses. In January 2023, Spotify announced it would lay off 600 employees, and within the year, it further reduced its workforce by 1,500 positions, representing about 17% of its total staff.