Spotify has announced another remarkable quarter of profits, marking a year since it first increased the prices of its Premium subscription plans.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, bouncing back from a loss of 247 million euros ($268 million) in the same period last year. Additionally, the number of monthly active users climbed by 14% year-over-year to reach 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. “We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Spotify’s stock surged nearly 14% in pre-market trading on Tuesday following the positive earnings report.
In June, Spotify announced a price increase for its Premium subscribers in the U.S. Starting this month, individual plan users will pay $12 (up by $1), Duo plan users will pay $17 (up by $2), and Family plan users will pay $20 (up by $3). This was the first increase in 13 years, which occurred last July, when the company raised membership costs by an average of $1.
Despite the price hikes, Spotify gained seven million net subscribers during the quarter, exceeding its previous forecasts by one million.
As the leading audio streaming service globally, Spotify’s users are reportedly the least likely to cancel their subscriptions compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company has faced financial struggles in the past. In 2022, Spotify’s stock plummeted by over two-thirds due to consecutive quarters of operating losses. In January 2023, the company laid off 600 employees, and less than a year later, it cut an additional 1,500 jobs, which accounted for approximately 17% of its workforce.