Spotify has announced another quarter of record profits, marking a significant turnaround one year after it raised prices for its Premium subscription plans for the first time.
The Swedish audio streaming platform 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. Monthly active users have increased by 14% year-on-year, reaching 626 million.
“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,” said CEO Daniel Ek in a statement. He emphasized that the company is progressing faster than anticipated, which is promising for its future.
Following the announcement of these impressive earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed plans to increase prices for its Premium users in the U.S. Starting this month, individual plans will see an increase of $1 to $12, Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This price adjustment came after the company raised membership rates for the first time in 13 years, by an average of $1 in July 2022.
Despite these increases, Spotify saw a net addition of seven million subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify’s users are considered the least likely to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, Spotify has faced financial challenges in the past. The company’s stock plummeted more than two-thirds in value in 2022 amid multiple quarters of operating losses. In January 2023, Spotify announced it would lay off 600 employees, and less than a year later, it further reduced its workforce by 1,500 jobs, or about 17% of its total staff.