Spotify has reported another record profit quarter, following the first-ever increase in its Premium plan prices last year.
The Swedish audio streaming service announced 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) in the same period last year. Additionally, the company saw a 14% annual growth in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for 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 noted that their timeline of growth has surpassed even their own expectations, setting a positive outlook for the future.
Following the strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced that it would raise prices for Premium listeners in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This price hike follows an average increase of $1 last July, which was the first adjustment in 13 years.
Interestingly, despite the price hikes, Spotify gained seven million net subscribers in the quarter, exceeding its previous estimates by one million.
According to a Bloomberg analysis, Spotify remains the world’s leading audio streaming platform, with its users showing the lowest likelihood among major streaming services to cancel their subscriptions. However, the company has faced financial challenges in the past, with its stock losing more than two-thirds of its value in 2022 amid multiple quarters of operational losses. Earlier this year, Spotify announced the layoffs of 600 employees and subsequently cut 1,500 jobs, accounting for roughly 17% of its workforce less than a year later.