Spotify has announced another quarter of record profits, one year after increasing the prices of its Premium subscription plans for the first time.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) in the same period last year. Additionally, the number of monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscription services in the U.S. Beginning this month, individual plan subscribers will see a $1 rise to $12, Duo plan users will pay an additional $2 to $17, and Family plan users will pay $3 more, totaling $20. This marked the first increase in membership costs in 13 years, with an average hike of $1 introduced in July 2022.
Despite the raised prices, Spotify managed to add seven million net subscribers in the last quarter, exceeding its initial guidance by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are the least likely to cancel their subscriptions compared to other audio and video streaming platforms. However, the company faced financial challenges in 2022, when its stock value plummeted by more than two-thirds due to several quarters of operating losses. In January 2023, Spotify announced a workforce reduction of 600 employees, which was followed by a further layoff of 1,500 jobs, representing around 17% of its staff.