Spotify has announced another record quarter of profits, marking a significant turnaround since it increased the prices of its Premium plans for the first time last year.
In the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a strong recovery from an operating loss of 247 million euros ($268 million) the same quarter last year. Monthly active users also saw a remarkable growth of 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 positive earnings report, Spotify’s stock saw a nearly 14% increase 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 see their fees rise by $1 to $12, Duo plan prices will increase by $2 to $17, and Family plan costs will go up by $3 to reach $20. This marked the first price increase in 13 years, which had previously averaged $1.
Despite these price hikes, Spotify managed to gain seven million net subscribers during the quarter, surpassing its prior guidance by one million.
Spotify continues to be the world’s leading audio streaming platform, with a Bloomberg analysis revealing that its users are less likely to cancel their subscriptions compared to those of other audio and video streaming services.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock value dropped by more than two-thirds amid a series of operating losses. In early 2023, it announced layoffs of 600 employees, which were followed by a further reduction of 1,500 jobs, equating to about 17% of its workforce, less than a year later.