Spotify has announced another quarter of record profits, marking a year since it first raised the prices of its Premium subscription plans.
The Swedish audio streaming service reported 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. Monthly active users increased by 14% year-over-year, reaching 626 million.
“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,” said CEO Daniel Ek in a statement. He emphasized that the company’s progress has exceeded expectations, indicating strong prospects for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price hike for Premium users in the United States. Starting this month, individual plan subscribers will pay an additional $1 (totaling $12), Duo plan users will pay $2 more ($17), and Family plan subscribers will see a $3 increase ($20). This increase came after the company raised membership prices by an average of $1 for the first time in 13 years in July of the previous year.
Despite these price increases, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming platform globally, with a Bloomberg analysis indicating that its users are the least likely to cancel their subscriptions compared to other audio or video streaming services.
However, the company’s financial health has faced challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds due to several quarters of operating losses. In January 2023, the company cut 600 jobs, and less than a year later, it laid off an additional 1,500 employees, representing around 17% of its workforce.