Spotify has reported another record quarter of profits, a year after the company raised the prices of its Premium plans for the first time in history.
The Swedish audio streaming platform revealed an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) from the same period last year. The number of monthly active users rose by 14% year-on-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 announcement of this stronger-than-expected 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 plans will increase by $1 to $12, Duo plans will rise by $2 to $17, and Family plans will see a $3 increase to $20. This marked the first membership hike in 13 years, with an average increase of $1 implemented last July.
Despite these price hikes, Spotify added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis highlighting that its users are the least likely to cancel their subscriptions compared to other audio and video streaming platforms.
However, the company’s financial performance has not always been robust. Spotify’s stock value dropped by more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, the company announced a workforce reduction of 600 employees and later cut 1,500 jobs, accounting for approximately 17% of its total staff.