Spotify announced another successful quarter of record profits, following its first-ever price increase of its Premium plans last year.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users rose by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only a great product but also a robust business,” CEO Daniel Ek stated. “We are ahead of even our own expectations. This sets a promising stage for the future.”
As a result of the positive 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 plan subscribers will now pay $12, which is a $1 increase, while Duo plans will be priced at $17 (an increase of $2), and Family plans will now cost $20, marking a $3 rise. The previous price hike occurred in July 2022, the first in 13 years, where costs were raised by an average of $1.
Notably, despite these increases, Spotify successfully added seven million net subscribers during the quarter, exceeding its prior guidance by one million.
As the leading audio streaming platform globally, Spotify’s users tend to be the least likely to cancel their memberships, according to a Bloomberg analysis.
However, the company’s financial history has faced challenges. In 2022, Spotify’s stock value plummeted by over two-thirds amid several quarters of operating losses. In January 2023, the company announced it would lay off 600 employees, and less than a year later, it made the decision to cut an additional 1,500 jobs, about 17% of its workforce.