Spotify has reported another quarter of record profits, marking a significant turnaround one year after the company increased prices for its Premium plans for the first time.
The Swedish audio streaming service posted an operating income of 266 million euros ($289 million) for the second quarter, an impressive improvement from a loss of 247 million euros ($268 million) during the same quarter last year. The number of monthly active users also rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, stating that Spotify continues to innovate and evolve as both a product and a business. He noted that the company has exceeded its own expectations, which gives a positive outlook for the future.
Following the release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its Premium services in the U.S. Beginning this month, individual plans will rise by $1 to $12, Duo plans will increase by $2 to $17, and Family plans will see a $3 hike to $20. This price adjustment follows a membership cost increase for the first time in 13 years, which took place last July.
Despite these price hikes, Spotify managed to gain seven million net subscribers during the last quarter, surpassing its previous guidance by one million.
As the leading audio streaming platform globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the company’s journey has not always been smooth. In 2022, Spotify’s stock lost over two-thirds of its value amid several quarters of operational losses. In early 2023, the company announced a workforce reduction of 600 employees, followed by another significant cut of 1,500 jobs, which accounted for about 17% of its total staff.