Spotify has reported record profits for another quarter, marking one year since the company increased its Premium subscription prices for the first time in history.
The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, a significant rebound from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the number of monthly active users grew by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We keep innovating and proving that we are not only a great product but also an increasingly strong business,” stated CEO Daniel Ek. He expressed optimism about the company’s trajectory, noting that it has surpassed their own expectations.
Following the positive earnings report, Spotify shares jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced that it would be increasing prices for its Premium users in the U.S. Starting this month, those on individual plans will see an increase of $1 (now $12), while Duo plans will rise by $2 (to $17), and Family plans will cost $3 more (now $20). This move came after the company raised prices for the first time in 13 years last July, by an average of $1.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding prior forecasts by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. Spotify’s stock value plummeted by more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, the company announced plans to lay off 600 employees. Less than a year later, it cut an additional 1,500 jobs, accounting for approximately 17% of its workforce.