Spotify has announced another record profit in its latest quarter, marking a significant turnaround since it increased the price 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, compared to a loss of 247 million euros ($268 million) the previous year. The platform also saw a 14% year-over-year rise in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism 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 this more than expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium subscribers in the U.S. Starting this month, individual plan users will pay an additional $1 (totaling $12), Duo plan users will pay an extra $2 ($17), and Family plan users will see a $3 increase ($20). This was the first membership price hike in 13 years, with an average increase of $1 implemented last July.
Despite the price hikes, Spotify successfully added seven million net subscribers in the last quarter, exceeding its own expectations by one million.
As the largest audio streaming service globally, Spotify has been shown to retain its users better than any other audio or video streaming platform, according to a Bloomberg analysis.
However, the company has faced significant financial challenges in the past. Spotify’s stock plummeted by over two-thirds in 2022 amidst ongoing operating losses. In January 2023, it announced a workforce reduction of 600 employees, followed by a further layoff of 1,500 jobs, equating to around 17% of its total staff, less than a year later.