Spotify has announced another quarter of record profits, marking a significant change since it raised the price of its Premium plans for the first time last year.
The audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement from a loss of 247 million euros ($268 million) a year prior. The number of monthly active users rose by 14% year-on-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,” stated CEO Daniel Ek. He added that their progress has exceeded expectations, which hints at a positive outlook for the future.
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in Premium subscription prices in the U.S. Starting this month, individual plan subscribers will see their fees rise by $1 to $12, Duo plans will increase by $2 to $17, and Family plans will go up by $3 to $20. This adjustment came a year after the company raised membership costs by an average of $1 for the first time in 13 years.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, exceeding its prior forecast by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to their peers in the audio and video streaming market, according to a Bloomberg analysis.
However, the company’s financial history has been tumultuous. In 2022, Spotify’s stock plummeted by over two-thirds as it experienced multiple quarters of operating losses. At the beginning of 2023, Spotify announced layoffs affecting 600 employees, and less than a year later, it eliminated 1,500 positions, which accounted for roughly 17% of its workforce.