Spotify has reported another quarter of record profits, a year after increasing the prices of its Premium plans for the first time.
The Swedish audio streaming company announced an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) a year ago. Monthly active users also saw a 14% annual increase, 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. “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 its better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S. Effective this month, individual plan users will pay $1 more ($12), Duo (two-person) plans will go up by $2 ($17), and Family plans will increase by $3 ($20). This comes after the Swedish company raised membership costs for the first time in 13 years last July by an average of $1.
Nonetheless, Spotify added seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the most popular audio streaming service worldwide, Spotify’s users are the least likely to cancel their memberships compared to other audio or video streaming giants, according to a Bloomberg analysis.
However, Spotify’s financial journey hasn’t always been smooth. In 2022, its stock value dropped by more than two-thirds due to several quarters of operating losses. In January 2023, the company announced plans to cut 600 jobs. Less than a year later, it reduced its workforce by 1,500 jobs, about 17% of its staff.