Spotify has announced another record profit quarter, marking a year since it first raised the price of its Premium plans. 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 period last year. The platform saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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, Spotify announced price increases for its Premium offerings in the U.S. Effective immediately, individual plan users will face a $1 increase to $12, Duo plan subscribers will see a $2 hike to $17, and Family plan users will pay $3 more, totaling $20. The previous price hike occurred last July, after 13 years of unchanged membership costs, averaging an increase of $1.
Despite the increased prices, Spotify added seven million net subscribers in the quarter, outperforming its prior projections by one million.
Spotify remains the leading audio streaming service globally, with a low cancellation rate among users compared to other audio and video platforms, according to a Bloomberg analysis.
However, the company’s financial history has had its challenges; in 2022, Spotify’s stock fell by over 66%, as the company encountered multiple quarters of operating losses. Earlier this year, Spotify announced layoffs of 600 employees, followed by a further reduction of 1,500 jobs, equating to about 17% of its workforce.