Spotify has announced another record profit quarter, following its first-ever price increase for Premium subscriptions last year.
The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant shift from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the company saw a 14% year-over-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s current trajectory, 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 the release of its strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will face a $3 increase, bringing their total to $20. This adjustment follows an average price hike of $1 last July, marking the first increase in 13 years.
Despite these price hikes, Spotify successfully added seven million net subscribers in the last quarter, surpassing its previous guidance by one million.
As the leading audio streaming platform globally, Spotify users are notably less likely to cancel their subscriptions compared to users of other audio or video streaming services, according to a Bloomberg analysis.
However, Spotify’s financial history has seen challenges. The company’s stock fell by more than two-thirds in 2022 due to several quarters of operational losses. In January 2023, Spotify announced plans to eliminate 600 positions, and less than a year later, it cut 1,500 jobs, representing around 17% of its workforce.