Spotify has announced another quarter of record profits, a year after it implemented its first-ever price increase for its Premium plans.
The Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also saw a boost, growing by 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium services in the U.S. Effective this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will face a $3 hike to $20. Last July marked the first increase in membership costs in 13 years, with an average increase of $1.
Despite the raised prices, Spotify successfully added seven million net subscribers in the quarter, exceeding its own guidance by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with its users showing the least tendency to cancel their subscriptions compared to other audio or video streaming competitors.
However, Spotify’s path to profitability hasn’t always been smooth. The company’s stock plummeted by more than two-thirds in 2022 due to several quarters of operational losses. In January 2023, Spotify announced plans to reduce its workforce by 600 employees, and further layoffs followed less than a year later, with an additional 1,500 jobs cut, amounting to roughly 17% of its total staff.