Spotify has announced another record-breaking quarter of profits, just a year after increasing the prices of its Premium plans for the first time.
The Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million) in the second quarter, a significant turnaround from the loss of 247 million euros ($268 million) reported the previous year. The number of monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement 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.” He added that the company’s growth timeline has surpassed their expectations, which is promising for the future.
Following the release of its better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium services in the U.S. Starting this month, individual plan users will see an increase of $1 to $12, Duo plan users will pay an additional $2 for a total of $17, and Family plan users will face a $3 increase to $20. This marked the first price hike in 13 years, with an average increase of $1 implemented last July.
Despite these price increases, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the world’s leading audio streaming service, Spotify users are the least likely to cancel their memberships compared to any major audio or video streaming platform, according to a Bloomberg analysis.
However, the company has not always performed well financially, with Spotify’s stock losing over two-thirds of its value in 2022 amid several quarters of operating losses. In response, Spotify announced plans to reduce its workforce, cutting 600 employees in January 2023 and later laying off 1,500 jobs, which represents about 17% of its total staff.