Spotify has announced another quarter of record profits, a year after it increased the prices of its Premium plans for the first time.
The Swedish audio streaming service revealed an operating income of 266 million euros ($289 million) in the second quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed confidence in the company’s direction, 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price increases for its Premium users in the U.S. Starting this month, individual plan users will see a $1 increase to $12, while Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This marked the first membership cost increase in 13 years, which was implemented last July when prices rose by an average of $1.
Despite these increases, Spotify gained seven million net subscribers in the last quarter, exceeding its earlier expectations by one million.
As the leading audio streaming platform globally, Spotify users are notably the least likely to cancel their subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past, with its stock dropping more than two-thirds of its value in 2022 due to several quarters of operating losses. In January 2023, Spotify announced plans to reduce its workforce by 600 employees, followed by another cut of 1,500 jobs, accounting for approximately 17% of its total staff, less than a year later.