Spotify has announced another quarter of record profits, marking one year since it increased the prices of its Premium plans for the first time ever.
The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) for the second quarter, a significant rebound from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also saw a 14% increase year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s direction, 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, the company announced price hikes for Premium users in the United States, which took effect this month. Individual plan users will pay an extra $1, bringing the total to $12. Duo plans will increase by $2 to $17, and Family plans will go up by $3 to $20. This price increase comes after Spotify raised membership costs for the first time in 13 years by an average of $1 last July.
Despite these increases, Spotify successfully added seven million net subscribers in the quarter, surpassing its previous guidance by one million.
Spotify remains the world’s leading audio streaming service and has been found to have the least likelihood of membership cancellations compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has not been without challenges. The stock lost over two-thirds of its value in 2022 due to multiple quarters of operating losses. In January 2023, the company made the decision to reduce its workforce by 600 employees, and less than a year later, it cut 1,500 jobs, constituting about 17% of its staff.