Spotify has reported another record quarter of profits, a year after increasing the prices of its Premium plans for the first time. The Swedish audio streaming service announced 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) during the same period last year. In addition, the platform saw a 14% year-over-year increase in monthly active users, bringing the total to 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. 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 a price increase for its Premium plans in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will experience a $3 increase to $20. This adjustment followed a $1 average increase in membership costs last July, marking the first price hike in 13 years.
Despite the price hikes, Spotify attracted seven million net new subscribers this quarter, surpassing its guidance by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are less likely than those of other audio or video platforms to cancel their subscriptions. However, the company faced challenges in the past, with its stock plummeting by over two-thirds in 2022 amid several quarters of operating losses. In January 2023, Spotify announced the elimination of 600 jobs, and less than a year later, it cut an additional 1,500 positions, amounting to about 17% of its workforce.