Spotify announced another quarter of record profits, marking a year since it first raised the prices of its Premium plans.
The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium plans in the U.S. Starting this month, individual plans will cost $12 (up by $1), Duo plans will now be $17 (up by $2), and Family plans will increase to $20 (up by $3). This marked the first rise in membership costs in 13 years, with an average increase of $1 last July.
Despite these price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its previous forecast by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to users of other audio or video platforms, according to a Bloomberg analysis.
However, the company’s financial performance has not always been strong. Spotify saw over a two-thirds drop in its stock value in 2022 due to several quarters of operating losses. In January 2023, it announced plans to lay off 600 employees, and less than a year later, it reduced its workforce by 1,500 jobs, amounting to approximately 17% of its staff.