Spotify announced another quarter of record profits, one year after it increased the prices for its Premium plans for the first time. The Swedish audio streaming platform 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) during the same period last year. The number of monthly active users rose by 14% year-on-year, reaching 626 million.
“It’s an exciting time at Spotify. We keep on innovating and demonstrating that we aren’t just a great product, but increasingly also a strong business,” said CEO Daniel Ek in a statement. “Our progress has exceeded even our own expectations. This is promising for our future.”
Following the announcement of its better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed it would increase prices for Premium users in the U.S. Beginning this month, individual plan users will pay an additional $1, making it a total of $12, while Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. In July of the previous year, the company adjusted membership prices for the first time in 13 years, with an average increase of $1.
Despite these price hikes, Spotify gained seven million net subscribers during the quarter, surpassing its previous expectations by one million.
Spotify remains the leading audio streaming service globally, and a Bloomberg analysis found that its users are the least likely to cancel their subscriptions compared to other streaming platforms.
However, the company’s financial performance has not always been so strong. In 2022, Spotify’s stock lost over two-thirds of its value amid multiple quarters of operating losses. In January 2023, the company announced it would eliminate 600 jobs. Less than a year later, it reduced its workforce further by cutting 1,500 positions, accounting for approximately 17% of its staff.