Spotify has achieved record profits for another quarter, marking a significant turnaround after it raised prices for its Premium plans for the first time ever last year.
In the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a stark contrast to a loss of 247 million euros ($268 million) from the previous year. The platform also saw a 14% increase in monthly active users, totaling 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 price hikes for its Premium plans in the U.S., which took effect this month. Individual plan users will now pay $12, a $1 increase, while Duo plans will cost $17, up by $2, and Family plans will rise to $20, an increase of $3. This marked the first increase in membership costs in 13 years.
Despite the price adjustments, Spotify welcomed seven million net new subscribers, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, and a Bloomberg analysis indicated that its users are less likely than those of any other audio or video streaming service to cancel their subscriptions.
However, the company has faced challenges in the past. Spotify’s stock fell by more than two-thirds in value during 2022 due to several quarters of operating losses. In early 2023, the company announced layoffs affecting 600 employees, followed by a further reduction of 1,500 jobs, which accounts for approximately 17% of its workforce.