Spotify has announced another record profit quarter, marking the company’s first price increase for its Premium plans just a year ago. The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from the 247 million euros ($268 million) loss incurred during the same period last year. Monthly active users jumped by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s trajectory, highlighting ongoing innovations and the transformation of Spotify into not only a top-tier product but also a thriving business. He noted that the company’s progress has surpassed their expectations, which is promising for the future.
Following the announcement of better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium service in the U.S., effective this month. Individual plan users will see a $1 increase to $12, while Duo plan users will pay $2 more at $17. Family plan prices will rise by $3 to $20. This marked the first membership cost hike in 13 years, following an average increase of $1 implemented last July.
Despite raising prices, Spotify managed to add seven million net subscribers during the quarter, exceeding its prior guidance by one million.
As the world’s leading audio streaming service, Spotify users are reportedly the least likely among streaming platforms to cancel their subscriptions, according to a Bloomberg analysis. However, the company has not always reported strong financials. In 2022, Spotify’s stock plummeted by over two-thirds due to a series of quarterly losses. In early January 2023, the company announced a reduction of 600 jobs, which was followed by another cut of 1,500 positions, constituting around 17% of its workforce less than a year later.