Spotify has reported a record-setting quarter, achieving significant profits just one year after implementing its first-ever price increase for Premium plans.
The Swedish audio streaming platform revealed an operating income of 266 million euros ($289 million) for the second quarter, a marked improvement from a loss of 247 million euros ($268 million) a year earlier. The number of monthly active users also rose by 14% year-over-year to reach 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. “We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the company’s strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium subscriptions in the U.S., effective this month. Individual plans will see an increase of $1, making the new price $12; Duo plans will rise by $2 to $17; and Family plans will go up by $3 to $20. This price adjustment came after an average membership increase of $1 last July, marking the first price change in 13 years.
Notably, despite these price hikes, Spotify managed to add seven million net subscribers during the quarter, surpassing its earlier guidance by one million.
As the world’s leading audio streaming service, Spotify has demonstrated that its users are less inclined to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company’s financial history has not always been positive. In 2022, Spotify’s stock plummeted by more than two-thirds due to several quarters of operational losses. In January 2023, the company announced a workforce reduction of 600 employees, and less than a year later, it cut an additional 1,500 jobs, amounting to approximately 17% of its workforce.