Spotify has reported another quarter of record profits, marking a year since it increased the price of its Premium plans for the first time. The Swedish audio streaming giant achieved an operating income of 266 million euros ($289 million) in the second quarter, contrasting with a loss of 247 million euros ($268 million) during the same period last year. Monthly active users surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s growth, 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. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium services in the U.S. Starting this month, individual plan users will see an increase of $1, bringing the total to $12, while Duo plan prices will rise by $2 to $17, and Family plan prices will increase by $3 to $20. This marked the first membership cost increase in 13 years, averaging $1.
Despite these higher prices, Spotify managed to add seven million net subscribers in the quarter, exceeding its initial forecast by one million.
Spotify continues to lead the global audio streaming market, with users showing a lower likelihood of canceling subscriptions compared to other audio or video streaming services, according to a Bloomberg analysis.
However, the company’s financial history has been challenging. Spotify’s stock plummeted by more than two-thirds in 2022 due to multiple quarters of operational losses. In early 2023, the company announced it would lay off 600 employees, followed by an additional 1,500 job cuts later, accounting for roughly 17% of its workforce.