Spotify has achieved a record profit for another quarter, a year after it raised the prices of its Premium subscription plans for the first time ever. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users rose by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for 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.” He noted that the company’s growth timeline has surpassed even their own expectations, which is promising for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its U.S. Premium subscribers. This month, individual plan prices increased by $1 to $12, Duo plans rose by $2 to $17, and Family plans went up by $3 to $20. Last July marked the first membership cost increase in 13 years, also averaging $1.
Despite the price hikes, Spotify attracted seven million net new subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming platform globally, Spotify users are among the least likely to cancel their subscriptions, according to a Bloomberg analysis. However, the company faced challenges in the past, with its stock value plummeting by more than two-thirds in 2022 due to several quarters of operational losses. In January 2023, it announced the layoff of 600 employees, and by the end of that year, it had laid off 1,500 workers, representing about 17% of its workforce.