Spotify has announced another quarter of record profits, one year after it implemented its first-ever price increase for Premium plans.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% annual increase in monthly active users, 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 the company’s success is unfolding on a timeline that has even surpassed their expectations, indicating a promising future ahead.
Following this positive earnings report, Spotify stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced that it would raise its Premium plan prices in the U.S., effective this month. Individual plan subscribers will see an increase of $1 to $12, Duo plan subscribers will pay $2 more at $17, and Family plan subscribers will see a rise of $3 to $20. This price adjustment follows the first increase in 13 years, initiated in July 2022, where membership costs were raised by an average of $1.
Despite these hikes in pricing, Spotify successfully gained seven million new subscribers during the quarter, exceeding its previous guidance by one million.
Spotify maintains its position as the leading audio streaming service globally, with its users being the least likely to cancel their memberships compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock lost over two-thirds of its value amid several quarters of operating losses. In early 2023, the company announced the layoffs of 600 employees, followed by another cut of 1,500 jobs, representing approximately 17% of its workforce, less than a year later.