Spotify has announced a record profit for another quarter, following its first-ever price increase for Premium plans last year.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the number of monthly active users rose by 14% year-over-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 its better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced that it would be raising prices for its Premium plans in the U.S. starting this month. Individual plan users will now pay $12, an increase of $1; Duo plan users will pay $17, an increase of $2; and Family plan users will pay $20, an increase of $3. This was the company’s first membership price hike in 13 years, averaging an increase of $1 across plans.
Despite these price hikes, Spotify successfully gained seven million net subscribers in the last quarter, exceeding its guidance by one million.
As the leading audio streaming platform globally, Spotify has the lowest cancellation rates among major audio and video streaming services, according to a Bloomberg analysis. However, the company has faced challenges in the past; its stock lost over two-thirds of its value in 2022 amid several quarters of operating losses. In early 2023, Spotify announced plans to lay off 600 employees, and by the beginning of this year, it had cut a total of 1,500 jobs, amounting to approximately 17% of its workforce.