Spotify has announced another record-breaking quarter just a year after it increased the prices of its Premium plans for the first time in its history.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) in the same quarter last year. The company also saw its monthly active users surge by 14% year-over-year, reaching 626 million.
In a statement, CEO Daniel Ek expressed his excitement about the company’s performance, 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 release of its earnings report, Spotify’s stock jumped nearly 14% during pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting this month, individual plan users will see an increase of $1 to $12, while Duo plan subscribers will pay $2 more, bringing their total to $17, and Family plan users will incur a $3 increase to $20. This change follows an average price hike of $1 imposed the previous July, marking the first increase in 13 years.
Despite the price hikes, Spotify managed to add seven million net subscribers in the latest quarter, exceeding its initial guidance by one million.
As the world’s leading audio streaming platform, Spotify boasts the lowest membership cancellation rates among major audio and video streaming services, according to a Bloomberg analysis.
However, the company has not always enjoyed such financial success. In 2022, Spotify’s stock plummeted by more than two-thirds amid multiple quarters of operational losses. In January 2023, the company laid off 600 employees, and less than a year later, it reduced its workforce by another 1,500 jobs, equating to around 17% of its total staff.