Spotify has announced another quarter of record profits, marking a significant turnaround since it raised the prices of its Premium plans for the first time a year ago.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also increased by 14% year-over-year, reaching a total of 626 million.
CEO Daniel Ek expressed optimism in a statement, saying, “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 announcement of their better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed plans to increase prices for its Premium users in the U.S. Starting this month, individual plan subscribers will see an increase of $1 to $12, Duo plan users will pay an additional $2, bringing their total to $17, and Family plan subscribers will incur a $3 increase, totaling $20. This price hike follows another adjustment made last July, which was the first membership cost increase in 13 years.
Despite raising prices, Spotify managed to add seven million net subscribers in the past quarter, exceeding its previous projections by one million.
Spotify remains the leading audio streaming service globally, and analysis by Bloomberg indicates that its users are less likely than those of other audio and video streaming platforms to cancel their subscriptions.
However, the company has faced financial struggles in the past. In 2022, Spotify’s stock value plummeted by more than two-thirds as it dealt with multiple quarters of operating losses. In early 2023, the company announced the elimination of 600 jobs, and later that year, it cut an additional 1,500 positions, representing about 17% of its workforce.