Spotify has achieved another record profit for the quarter, marking a significant turnaround since it first raised the prices of its Premium plans last year.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a sharp rise from a loss of 247 million euros ($268 million) in the same period last year. The company also saw a 14% increase in monthly active users, bringing the total to 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we aren’t just delivering a great product but are also evolving into a strong business,” said CEO Daniel Ek. “Our progress has exceeded our expectations, and this is promising for our future.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced an increase in its Premium subscription prices in the U.S. Effective this month, individual plan users will now pay $12, up by $1, while Duo plan users will pay $17, an increase of $2, and Family plan users will see a $3 hike, bringing their total to $20. This marked the first increase in membership costs in 13 years, with last year’s changes averaging an additional $1.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, surpassing its own forecast by one million.
Spotify remains the leading audio streaming platform globally, with a Bloomberg analysis indicating its users are less likely to terminate their subscriptions compared to other streaming services.
However, Spotify’s financial journey has not always been smooth. In 2022, the company’s stock plummeted by over two-thirds as it dealt with multiple quarters of operating losses. In January 2023, Spotify announced layoffs of 600 employees, followed by a further reduction of 1,500 jobs, or about 17% of its workforce, less than a year later.