Spotify has reported another quarter of record profits, marking a significant turnaround one year after it increased the prices of its Premium plans for the first time in history.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The company also saw its monthly active users rise by 14% year-over-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,” stated CEO Daniel Ek. He expressed optimism about the company’s trajectory, noting that their progress has surpassed even their own expectations, which bodes well for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced it would increase the Premium subscription prices in the United States. Starting this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more at $17, and Family plan fees will rise by $3 to $20. Last July marked the first price hike in 13 years, with increases averaging $1.
Despite these price hikes, Spotify successfully added seven million net subscribers in the last quarter, which was one million more than its previous projections.
Spotify remains the leading audio streaming service globally, with users being the least likely to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company has faced significant financial challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds as the company dealt with several quarters of operating losses. Earlier this year, Spotify announced plans to lay off 600 employees, followed by another round of cuts affecting 1,500 jobs, accounting for roughly 17% of its workforce.