Spotify has reported another quarter of record profits, marking a significant turnaround since it raised the prices of its Premium plans for the first time ever last year.
The Swedish audio streaming giant revealed an operating income of 266 million euros ($289 million) for the second quarter, in contrast to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm, 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 impressive earnings report, Spotify’s stock surged 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 plans will cost $12 (up by $1), Duo plans will rise to $17 (up by $2), and Family plans will increase to $20 (up by $3). The company raised membership costs for the first time in 13 years last July, implementing an average increase of $1.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, users of Spotify are the least likely among major audio or video streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, the company has not always enjoyed such favorable financial results. Spotify’s stock declined by more than two-thirds in 2022, as it experienced multiple quarters of operational losses. In January 2023, the company announced the layoff of 600 employees and less than a year later, reduced its workforce by 1,500 jobs, accounting for about 17% of its staff.