Spotify has announced another quarter of record profits, marking a significant achievement just one year after the company increased the prices of its Premium plans for the first time.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a notable turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also saw its monthly active users soar by 14% year-over-year, reaching a total of 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,” stated CEO Daniel Ek. He added that the company is operating on a timeline that has exceeded their expectations, which is promising for its future.
Following the release of the impressive 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 pay an additional $1 (now $12), Duo plan subscribers will see a $2 increase (now $17), and Family plan users will pay $3 more (now $20). This past July marked the first membership price hike in 13 years, with an average increase of $1.
Despite the price hikes, Spotify added seven million net subscribers during the quarter, exceeding its own guidance by one million.
As the leading audio streaming platform globally, Spotify has also been noted for having the lowest cancellation rates among major audio and video streaming services, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock lost more than two-thirds of its value due to several quarters of operating losses. Earlier this year, the company announced job cuts affecting 600 employees, followed by another round of cuts impacting 1,500 positions, or roughly 17% of its workforce.