Spotify has announced another quarter of record profits, achieving this milestone just one year after raising prices for its Premium subscription plans for the first time in its history.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The platform’s monthly active users also saw growth, increasing by 14% year-on-year to reach 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the announcement of its strong earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify disclosed plans to increase Premium subscription prices in the U.S. Effective this month, individual plan users will see a $1 increase to $12, Duo plan users will face a $2 rise to $17, and Family plan users will incur a $3 hike to $20. This increase marked the first adjustment in membership pricing in 13 years, with an average increase of $1 implemented last July.
Despite the price raises, Spotify managed to add seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial performance has not always been positive. In 2022, Spotify’s stock value plummeted by more than two-thirds as it struggled with multiple quarters of operating losses. The company also announced plans to reduce its workforce, cutting 600 jobs in January 2023, followed by another 1,500 layoffs—approximately 17% of its total staff—less than a year later.