Spotify has announced a record quarter of profits, marking a significant turnaround just a year after it increased the prices of its Premium subscription plans for the first time.
The Swedish audio streaming service 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 company also experienced a 14% annual growth in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s future, 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 impressive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
Earlier in June, the company announced an increase in prices for U.S. Premium users, effective this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay an additional $2 for a total of $17, and Family plan users will pay $3 more, bringing the cost to $20. This price adjustment follows an average $1 hike in membership costs from last July, which was the first increase in 13 years.
Despite the price increases, Spotify added seven million net subscribers in the quarter, exceeding its previous projections by one million.
Spotify remains the leading audio streaming platform globally, with users less likely to cancel their subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the company’s financial history has not always been positive. In 2022, Spotify’s stock value plummeted by more than two-thirds due to ongoing operational losses. In early 2023, the company announced layoffs affecting 600 employees, which was followed by a more significant reduction of 1,500 jobs, representing about 17% of its workforce.