Spotify has announced record profits for another quarter, marking a year since the company implemented its first-ever price increase for Premium plans.
In the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million), a significant turnaround from a loss of 247 million euros (about $268 million) during the same period last year. The platform also saw a 14% year-over-year increase in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate, demonstrating that we are not only a great product but also an increasingly successful business,” stated CEO Daniel Ek. “Our progress has surpassed even our expectations, which bodes well 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 its U.S. Premium subscribers, effective this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more, totaling $17, and Family plan users will face a $3 rise to $20. The previous price increase, which was the first in 13 years, averaged $1.
Despite the price adjustments, Spotify managed to add seven million net subscribers in the latest quarter, surpassing its prior guidance by one million.
A Bloomberg analysis revealed that Spotify is the most popular audio streaming service globally, with users being the least likely to cancel their memberships compared to other audio or video streaming platforms.
However, the financial landscape for Spotify has not always been bright. The company’s stock significantly declined during 2022, losing over two-thirds of its value amid multiple quarters of operating losses. In January 2023, Spotify announced a reduction of 600 employees, followed by a further job cut of 1,500 positions, which represented about 17% of its workforce.