Spotify has announced another quarter of record profits, one year after it increased the price of its Premium plans for the first time.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. The company also saw a 14% year-over-year growth in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify,” said CEO Daniel Ek. “We continue to innovate and demonstrate that we are not only a great product but increasingly a great business as well. This progress has surpassed even our expectations, which bodes well for our future.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more at $17, and Family plan users will face a $3 increase at $20. This marks the first membership cost increase in 13 years, with the previous rise occurring in July 2022.
Despite the price increases, Spotify successfully added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the world’s leading audio streaming service, Spotify users are the least likely among audio and video streaming companies to cancel their subscriptions, according to a Bloomberg analysis.
However, Spotify’s financial performance has not always been strong. Last year, its stock plummeted by more than two-thirds as the company endured several quarters of operating losses. In January 2023, Spotify announced job cuts affecting 600 employees, followed by a reduction of 1,500 jobs, which accounts for approximately 17% of its workforce, less than a year later.