Spotify has reported record profits for another quarter, following its first-ever price increase for Premium plans last year. The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from the 247 million euro ($268 million) loss reported during the same period last year. The number of monthly active users also saw impressive growth, rising 14% year-on-year to reach 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. He noted that the company’s growth trajectory has surpassed its own expectations, indicating a promising future.
In reaction to the strong earnings report, Spotify’s stock soared nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for Premium users in the U.S. Starting in October, individual plan users will pay $12 instead of $11, duo plan users will incur a $2 increase to $17, and family plan users will see their costs rise by $3 to $20. This marked the first price adjustment in 13 years, with an average hike of $1 last July.
Despite the price increases, Spotify successfully added seven million net subscribers in this latest quarter, exceeding its previously set expectations by one million.
Spotify remains the leading audio streaming service globally, with a recent Bloomberg analysis indicating users are less likely to cancel their memberships compared to other streaming platforms. However, the company has faced challenges in the past; Spotify’s stock value plummeted by over two-thirds in 2022 amidst multiple quarters of losses. In January 2023, it announced a workforce reduction of 600 employees, followed by another cut of 1,500 jobs, accounting for roughly 17% of its total staff.