Spotify has reported another quarter of record profits, marking a year since it first raised the price of its Premium plans.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a significant recovery from a loss of 247 million euros ($268 million) the previous year. In addition, the platform’s monthly active users increased by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in subscription prices for Premium users in the U.S., effective from this month. Individual plan subscribers will see a $1 increase to $12, Duo plan users will pay $2 more to reach $17, and Family plan costs will rise by $3 to $20. This price adjustment comes after the company raised membership costs by an average of $1 for the first time in 13 years last July.
Despite the price hikes, Spotify managed to add seven million net subscribers in the quarter, surpassing its guidance by one million.
According to a Bloomberg analysis, Spotify remains the world’s leading audio streaming platform, with users being the least likely among streaming giants to cancel their memberships.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds due to several quarters of operating losses. In January 2023, Spotify announced layoffs affecting 600 employees, and later cut around 1,500 jobs, which accounts for approximately 17% of its workforce.