Spotify has reported another quarter of record profits, marking a year since it first raised the prices of its Premium subscription plans.
The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) from the same period last year. Additionally, the platform saw a 14% year-over-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for the company’s progress, 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 announcement of its better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed plans to increase prices for its Premium users in the United States, effective this month. Individual plan users will now pay $12, which is a $1 increase. Duo plan users will see a $2 increase to $17, while Family plan members will pay $20, up by $3. This came after the company raised membership prices for the first time in 13 years by an average of $1 in July.
Despite these price hikes, Spotify added 7 million net subscribers in the quarter, exceeding its previous guidance by 1 million.
As the most popular audio streaming service globally, Spotify users are reported to be the least likely to cancel their subscriptions compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company faced significant financial challenges in the past. Spotify’s stock lost over two-thirds of its value in 2022 due to several quarters of operating losses. In January 2023, Spotify announced layoffs impacting 600 employees, and less than a year later, the company cut 1,500 jobs, equating to around 17% of its workforce.