Spotify has announced another quarter of record profits, coinciding with the first price increase of its Premium plans in history just a year ago.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. The number of monthly active users surged 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. He emphasized that the company’s progress has surpassed even its own expectations, indicating a promising outlook for the future.
Following the positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced increased prices for its Premium users in the U.S. Starting this month, individuals will pay $12, an increase of $1, while Duo plans will increase by $2 to $17 and Family plans will rise by $3 to $20. This price adjustment marks the first membership cost increase for the company in 13 years.
Despite the rising costs, Spotify added seven million net subscribers during the quarter, exceeding its prior guidance by one million.
As the leading audio streaming service globally, a Bloomberg analysis revealed that Spotify users are the least likely to cancel their subscriptions compared to other streaming services.
However, the company’s financial performance has not always been consistent. In 2022, Spotify’s stock plummeted by more than two-thirds amidst several quarters of operating losses. In early 2023, the company announced layoffs affecting 600 employees, followed by another round of job cuts impacting 1,500 positions, which is about 17% of its workforce.