Spotify has announced another record-breaking quarter of profits, marking one year since the company first raised its Premium subscription prices.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users surged 14% year-over-year to reach 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not just a great product, but increasingly a thriving business,” stated CEO Daniel Ek. He expressed optimism about the company’s growth trajectory, which has surpassed even internal expectations, suggesting a positive outlook for the future.
Following the earnings announcement, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify disclosed plans to increase Premium prices for U.S. users. Starting this month, individual plan subscribers will pay $12, an increase of $1, Duo plans will rise to $17, up by $2, and Family plans will cost $20, reflecting a $3 increase. This marked the first price hike for the service in 13 years, averaging $1 across its various membership levels.
Despite these price adjustments, Spotify managed to gain seven million net subscribers during the quarter, exceeding its prior expectations by one million.
As the leading audio streaming service globally, Spotify users are among the least likely to cancel their subscriptions, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. Spotify’s stock value plummeted by over two-thirds in 2022 due to several quarters of operating losses. To address these issues, the company announced in January 2023 that it would lay off 600 employees, followed by additional layoffs of 1,500 staff members, or approximately 17% of its workforce, less than a year later.