Spotify has announced another quarter of record profits, achieving this milestone a year after it increased the price of its Premium subscription plans for the first time.
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) during the same quarter last year. Additionally, the platform saw a 14% year-over-year growth in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about 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 release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S., effective this month. Individual plans will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will cost $3 more, totaling $20. This pricing adjustment follows a previous increase last July, marking the first membership cost rise in 13 years.
Despite the increases, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous forecast by one million.
As the leading audio streaming service globally, Spotify is noted for having the most loyal user base among audio and video streaming platforms, according to a Bloomberg analysis. However, the company has faced challenges in the past; in 2022, Spotify’s stock value plummeted by more than two-thirds due to multiple quarters of operating losses. Earlier this year, the company announced the layoff of 600 employees, followed by an additional reduction of 1,500 jobs, which accounted for approximately 17% of its workforce.