Spotify has announced another quarter of record profits 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 ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. The number of monthly active users rose by 14% year-on-year, reaching 626 million.
“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,” said CEO Daniel Ek in a statement. He noted that the company is achieving results that have even surpassed their own expectations, which is promising for the future.
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting this month, individual plan users will pay $1 more, increasing to $12. Duo plans will see a $2 increase to $17, while Family plans will rise by $3 to $20. This price adjustment comes after the company raised membership costs by an average of $1 last July, marking the first increase in 13 years.
Despite the price hikes, Spotify added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their memberships compared to those of other audio or video streaming services, according to a Bloomberg analysis.
However, the company’s financial performance has not always been strong. In 2022, Spotify’s stock value dropped by more than two-thirds as it experienced multiple quarters of operating losses. In January 2023, the company announced plans to lay off 600 employees, followed by a further reduction of 1,500 jobs, which constitutes about 17% of its workforce less than a year later.