Spotify has reported another quarter of record profits, marking one year since the company first raised the prices of its Premium plans.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) in the same period last year. During this time, the number of monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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 release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S., which took effect this month. Individual plan users will now pay $12, an increase of $1; Duo plan users will pay $17, up by $2; and Family plan users will now pay $20, a rise of $3. This followed the company’s first price increase in 13 years last July, which averaged an additional $1.
Despite these price adjustments, 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 less likely than those of other audio or video platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, the company’s financial history has not always been favorable. In 2022, Spotify’s stock lost over two-thirds of its value due to several quarters of operating losses. In January 2023, the company announced layoffs of 600 employees, and later cut approximately 1,500 jobs, or about 17% of its workforce.