Spotify has reported another quarter of record profits, marking a significant turnaround since it first raised the price of its Premium plans a year ago.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a sharp increase from a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users also rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s growth, 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 rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S. Starting in July, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more at $17, and Family plan users will incur a $3 increase to $20. The company had raised subscription costs for the first time in 13 years last July, implementing an average increase of $1.
Despite these price rises, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the leading audio streaming platform worldwide, Spotify users are among the least likely to cancel their subscriptions compared to other audio or video streaming services, according to a Bloomberg analysis.
However, the company’s financial situation wasn’t always so promising. In 2022, Spotify’s stock value plummeted by more than two-thirds as the company faced several quarters of operating losses. In January 2023, Spotify announced plans to lay off 600 employees, and less than a year later, it reduced its workforce by an additional 1,500 jobs, or around 17% of its staff.