Spotify has announced a record profit for another quarter, marking a significant turnaround since it raised the price of its Premium plans for the first time last year.
The Swedish audio streaming service 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 in the same period the previous year. The company also reported a 14% year-over-year increase in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We keep innovating and proving that we are not just a great product, but also an increasingly robust business,” stated CEO Daniel Ek. “We are doing this faster than we initially expected, which is promising for our future.”
Following the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting this month, individual plan users will face a $1 increase to $12, Duo plan subscribers will pay $2 more to reach $17, and Family plan users will see an increase of $3, bringing their total to $20. This price adjustment came after the company raised membership costs for the first time in 13 years by an average of $1 last July.
Despite these hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its own projections by one million.
As the leading audio streaming platform globally, Spotify users are the least likely to cancel their subscriptions compared to other audio or video streaming services, according to a Bloomberg analysis.
However, the company has faced challenges in the past. In 2022, Spotify’s stock value plummeted by more than two-thirds, and the firm encountered multiple quarters of operating losses. In January 2023, it announced plans to lay off 600 employees, followed by another 1,500 job cuts, roughly 17% of its workforce, less than a year later.