Spotify has reported record profits for another quarter, marking a year since it increased the prices of its Premium plans for the first time ever.
The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) for the second quarter, contrasting with a loss of 247 million euros ($268 million) from the same period last year. The number of monthly active users rose by 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. “We are achieving this on a timeline that has exceeded even our own expectations, which bodes very well for the future.”
In response to the company’s unexpectedly strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for its Premium users in the U.S. Starting this month, individual plan users will now pay an additional $1, bringing their total to $12 per month. Duo plans will see an increase of $2, now costing $17, while Family plans will rise by $3, totaling $20. This price adjustment follows a $1 average increase in membership costs implemented last July, the first in 13 years.
Despite the price hikes, Spotify experienced a net addition of seven million subscribers in the last quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are the least likely among streaming competitors to cancel their subscriptions. However, the company has faced challenges in the past; in 2022, Spotify’s stock value plummeted by more than two-thirds due to several quarters of operating losses. In January 2023, the company announced job cuts affecting 600 employees, and less than a year later, it laid off 1,500 workers, approximately 17% of its workforce.