Spotify has announced another quarter of record profits, a year after it raised the prices of its Premium subscriptions for the first time ever.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. The company also saw its monthly active users rise by 14% year-over-year, 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 release of the better-than-expected 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, individual plans will cost $12, up by $1; Duo plans will rise to $17, an increase of $2; and Family plans will go up to $20, which is a $3 increase. This followed a prior adjustment last July, when the company raised membership fees for the first time in 13 years.
Despite these increases, Spotify managed to add seven million net subscribers in the quarter, exceeding its previous expectations by one million.
Spotify is the leading audio streaming service in the world, and an analysis by Bloomberg indicated that its users are the least likely to cancel their memberships compared to other audio and video streaming platforms. However, the company has not always enjoyed such financial success. In 2022, Spotify’s stock fell by more than two-thirds as it recorded several quarters of operating losses. In early 2023, the company announced it would lay off 600 employees and later cut an additional 1,500 jobs, representing about 17% of its workforce.