Spotify has announced another record profit for the quarter, marking a significant achievement one year after it increased the price for its Premium subscription plans for the first time ever.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a notable turnaround from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the platform saw a 14% annual increase in monthly active users, reaching a total of 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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium services in the U.S., which took effect this month. Individual plan subscribers will now pay $12, reflecting a $1 increase, while Duo plan users will see a $2 increase to $17, and Family plan subscribers will pay $20, which is an increase of $3. This marked the first price rise for memberships in 13 years.
Even with these increases, Spotify managed to add seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the world’s leading audio streaming platform, Spotify boasts that its users are the least likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the company’s financial health has faced challenges in recent years. Spotify’s stock plummeted more than 66% in 2022 as it dealt with consecutive quarters of operating losses. In January 2023, the company announced layoffs of 600 employees, followed by an additional reduction of about 1,500 jobs, constituting approximately 17% of its workforce, less than a year later.