Spotify has announced another quarter of record profits just a year after implementing its first-ever price increase for Premium plans.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) in the same period last year. The platform also experienced a 14% annual growth in its monthly active users, reaching 626 million.
Spotify’s CEO, Daniel Ek, expressed enthusiasm about the company’s ongoing innovations, stating that they are proving to be not only a great product but also a growing business. He noted that their progress has surpassed their own expectations, which is promising for the future.
Following the release of this positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users. Effective this month, individual plan users will see a $1 rise to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will face an increase of $3, bringing their total to $20. This price hike followed an average increase of $1 in membership costs that had not occurred in 13 years.
Despite these increases, Spotify successfully added seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify users show the lowest likelihood of cancelling their memberships compared to other streaming platforms, according to a Bloomberg analysis.
However, the company faced financial challenges in the past, with its stock losing more than two-thirds of its value in 2022 due to multiple quarters of operating losses. In early 2023, Spotify announced the layoffs of 600 employees and, less than a year later, cut approximately 1,500 jobs, or about 17% of its workforce.