Spotify has reported another record profit quarter following its first-ever price increase for Premium plans last year.
The Swedish audio streaming service announced 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 also saw its monthly active users rise by 14% year-on-year, 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 announcement of their better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company disclosed that it would increase prices for U.S. Premium users effective this month. Individual plan users will now pay $12 (up $1), Duo plan users will pay $17 (up $2), and Family plan users will pay $20 (up $3). This was the first membership cost hike in 13 years, averaging an increase of $1 last July.
Despite these price increases, Spotify managed to gain seven million net subscribers in the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their memberships compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the company’s financial performance has not always been robust. In 2022, Spotify’s stock value plummeted by more than two-thirds, and the company endured several quarters of operational losses. In January 2023, the organization announced a workforce reduction of 600 employees, followed by a further cut of 1,500 jobs, representing approximately 17% of its total staff, less than a year later.