Spotify has announced another quarter of record profits just a year after increasing the prices of its Premium subscription plans for the first time in its history.
The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to the loss of 247 million euros ($268 million) reported the previous year. Additionally, the number of monthly active users grew by 14% year over year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s future, 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 earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for Premium users in the U.S. Starting this month, the cost for individual plans rose by $1 to $12, while Duo plans increased by $2 to $17 and Family plans by $3 to $20. Last July marked the first price hike in 13 years, with an average increase of $1.
Despite these price hikes, Spotify attracted seven million new net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify’s users are reportedly the least likely among streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, Spotify’s financial journey has faced challenges. The company saw its stock value drop over two-thirds in 2022, attributed to several quarters of operational losses. In January 2023, Spotify announced a reduction of 600 employees, and by the end of the year, it had cut 1,500 jobs, which accounted for approximately 17% of its workforce.