Spotify has announced another quarter of record profits, marking a significant turnaround a year after it increased the prices of its Premium plans for the first time.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) recorded in the same period last year. The company also saw a 14% year-over-year growth in monthly active users, reaching a total of 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 release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users. Starting this month, individual plan subscribers will see their monthly fees rise by $1 to $12, while the Duo plans will increase by $2 to $17 and Family plans will go up by $3 to $20. This was the first membership price increase after 13 years, with an average rise of $1 last July.
Despite the hikes, Spotify managed to gain seven million net new subscribers during the quarter, surpassing its own forecasts by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial history has not always reflected such success. In 2022, the company saw its stock value plummet by more than two-thirds amid several quarters of financial losses. In early 2023, Spotify announced layoffs affecting 600 employees, followed by additional cuts of 1,500 jobs, which represented approximately 17% of its workforce, less than a year later.