Spotify has reported another quarter of record profits, following its first-ever price increase for Premium plans a year ago.
The Swedish audio streaming company achieved an operating income of 266 million euros ($289 million) in the second quarter, a notable improvement from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users rose by 14% year-over-year to reach 626 million.
“Its 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 progress is occurring at a pace that has surpassed the company’s own expectations, which is promising for its future.
Following the stronger-than-anticipated earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price hike for Premium users in the U.S., effective this month. Individual plans will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. Last July, Spotify had raised membership costs for the first time in 13 years by an average of $1.
Despite these price increases, the company added seven million net subscribers in the quarter, exceeding its prior guidance by one million.
Spotify continues to lead as the world’s most popular audio streaming service, and according to a Bloomberg analysis, its users are the least likely among streaming platforms to cancel their memberships.
However, the company has faced challenges in the past. Spotify’s stock plummeted over two-thirds of its value in 2022 due to several 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, representing approximately 17% of its workforce, less than a year later.