Spotify has reported another record profit quarter, following its first price increase for Premium plans last year.
The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The platform also experienced a 14% 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting this month, individuals will see their subscription cost rise by $1 to $12, Duo plans will increase by $2 to $17, and Family plans will go up by $3 to $20. This change comes after the company raised membership prices for the first time in 13 years by an average of $1 in July of last year.
Despite the price hikes, Spotify added seven million net subscribers in the latest quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, a Bloomberg analysis found that Spotify users are the least likely to cancel their subscriptions compared to those on other audio or video platforms.
However, Spotify has faced financial difficulties in the past. The company’s stock value dropped by more than two-thirds in 2022 due to multiple quarters of operating losses. In January 2023, Spotify announced a reduction of 600 jobs, followed by an additional cut of 1,500 positions, or approximately 17% of its workforce, less than a year later.