Spotify has announced another quarter of record profits, just one year after increasing the prices of its Premium subscription plans for the first time in its history.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, in contrast to a loss of 247 million euros ($268 million) in the same period last year. Additionally, the number of monthly active users surged 14% year-over-year, reaching 626 million.
“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,” said CEO Daniel Ek in a statement. He emphasized that the company’s progress has exceeded its own expectations, indicating promising prospects for the future.
Following the release of its better-than-anticipated earnings, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for Premium users in the U.S. Starting this month, individual plan subscribers will pay $1 more, bringing the total to $12. Those on Duo plans will see a $2 increase to $17, while Family plan users will pay an additional $3 for a total of $20. This increase comes after the company raised membership prices for the first time in 13 years last July, with an average increase of $1.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the world’s leading audio streaming service, Spotify’s users are less likely to cancel their memberships compared to those of other streaming platforms, according to a Bloomberg analysis.
However, the company’s financial journey has not always been successful. In 2022, Spotify’s stock lost over two-thirds of its value amid multiple quarters of operating losses. In January 2023, Spotify announced it would be laying off 600 employees, and less than a year later, it cut 1,500 jobs, which accounts for approximately 17% of its workforce.