Spotify has announced another quarter of record profits, marking a significant turnaround since it raised prices for its Premium plans for the first time in history last year.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also surged, increasing by 14% year over year to reach 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 announcement of its better-than-expected earnings report, Spotify’s stock experienced a nearly 14% jump in pre-market trading on Tuesday.
In June, Spotify indicated that it would be raising prices for Premium users in the U.S. Beginning this month, individual plan users will pay an additional $1, bringing their total to $12; Duo plan users will see an increase of $2, totaling $17; and Family plan users will pay $3 more, amounting to $20. Last July, the company had raised membership prices for the first time in 13 years by an average of $1.
Despite these price hikes, Spotify gained seven million net subscribers in the quarter, which was one million more than anticipated.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to other audio or video streaming services, according to an analysis by Bloomberg.
The company, however, faced challenges in the past, losing over two-thirds of its stock value in 2022 due to recurring operating losses. In January 2023, Spotify announced a workforce reduction of 600 employees, followed by an additional cut of 1,500 jobs—approximately 17% of its total staff—less than a year later.