Spotify has announced another quarter of record profits, just a year after it increased the price of its Premium subscription plans for the first time.
The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant contrast to the loss of 247 million euros ($268 million) recorded during the same period last year. Additionally, the number of monthly active users surged by 14% year-over-year, reaching 626 million.
In a statement, CEO Daniel Ek expressed his enthusiasm, noting, “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 positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its U.S. Premium subscribers, effective this month. Individual plan users will see a $1 increase (now $12), Duo plan users will pay $2 more (now $17), and Family plan users will pay $3 extra (now $20). The decision to increase membership fees, which marked the first such move in 13 years, came after an average rise of $1 last July.
Despite the increased prices, Spotify successfully gained seven million net subscribers during the quarter, exceeding its previous forecasts by one million.
As the leading audio streaming platform globally, Spotify users are notably less likely to cancel their subscriptions compared to users of other streaming services, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. In 2022, the company’s stock lost more than two-thirds of its value amid several quarters of operating losses. In January 2023, the company announced layoffs of 600 employees, and less than a year later, it cut an additional 1,500 jobs, accounting for about 17% of its workforce.