Spotify has announced a new record in profits, just a year after implementing its first-ever price increase for Premium plans.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a significant recovery from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also saw a robust 14% year-on-year growth, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s performance, 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 users in the U.S., effective this month. Individual plan subscribers will see a $1 increase to $12, while Duo plans will rise by $2 to $17 and Family plans will cost $3 more, totaling $20. This marked the first increase in membership fees in 13 years, with the company raising rates by an average of $1 last July.
Despite the price hikes, Spotify managed to gain seven million net subscribers during the quarter, surpassing its own forecasts by one million.
Spotify continues to be the leading audio streaming service globally, with users demonstrating a lower tendency to cancel subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company has faced challenges in the past. In 2022, Spotify’s stock value dropped by more than two-thirds due to several consecutive quarters of operating losses. The company announced layoffs of 600 employees in January 2023 and nearly a year later, cut an additional 1,500 jobs, which represents about 17% of its workforce.