Spotify has reported record profits for yet another quarter, marking a notable milestone coming one year after the company raised prices for its Premium subscriptions for the first time.
The Swedish audio streaming giant announced 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) the previous year. Monthly active users also saw an impressive increase of 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and are proving that we are not only a great product but also an increasingly strong business,” said CEO Daniel Ek in a statement. He expressed confidence that the company is progressing faster than anticipated, which he believes is promising for future growth.
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the United States. 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 members will pay an extra $3, bringing their total to $20. This price hike followed an average increase of $1 in membership costs last July, the first adjustment in 13 years.
Despite these price increases, Spotify successfully added seven million net subscribers in the last quarter, exceeding its earlier guidance by one million.
As the most popular audio streaming service worldwide, Spotify users are the least likely among audio and video platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, Spotify has faced its share of financial difficulties. The company’s stock fell more than two-thirds of its value in 2022 due to multiple quarters of operating losses. In January 2023, Spotify announced layoffs of 600 employees, and less than a year later, the company reduced its workforce by 1,500 jobs, accounting for approximately 17% of its staff.