Spotify has announced another quarter of record profits, marking a significant turnaround since it first raised the price of its Premium plans last year.
The Swedish audio streaming platform reported an operating profit of 266 million euros ($289 million) for the second quarter, a remarkable improvement from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also surged by 14% year-over-year, reaching 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, which bodes very well for the future.”
Following the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium subscription in the U.S. Users on individual plans will now pay $12, an increase of $1, while Duo plans have risen by $2 to $17, and Family plans have gone up by $3 to $20. This marks the first price hike for membership plans in 13 years.
Despite the price adjustments, Spotify successfully gained seven million net subscribers during the quarter, exceeding its forecast by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with its users being the least likely among major audio and video streaming platforms to cancel their subscriptions.
However, the company’s financial journey has not always been smooth sailing. In 2022, Spotify stock plummeted by more than two-thirds in value due to several quarters of operating losses. Earlier this year, the company announced it would be laying off 600 employees, followed by another reduction of 1,500 jobs, representing about 17% of its workforce.