Spotify has announced record profits for another quarter, a year after it increased the prices of its Premium subscription plans for the first time.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% annual growth in monthly active users, reaching 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 a price increase for its Premium plans in the U.S. Effective this month, individual plans will see a rise of $1 to $12, Duo plans will increase by $2 to $17, and Family plans will cost $3 more, totaling $20. This followed a general price hike of about $1 after 13 years in July 2022.
Despite these price hikes, Spotify gained seven million net subscribers in the quarter, exceeding its prior guidance by one million.
According to a Bloomberg analysis, Spotify remains the leading audio streaming service globally, with users less likely to cancel their subscriptions compared to other audio and video streaming platforms.
However, Spotify’s financial journey has not been without challenges. The company experienced a steep decline in stock value in 2022, losing over two-thirds of its worth, as it navigated several quarters of operating losses. In early 2023, it announced layoffs of 600 employees, followed by another reduction of 1,500 jobs, accounting for about 17% of its workforce.