Spotify has announced another quarter of record profits, following its first-ever price increase for Premium plans a year ago.
The Swedish audio streaming platform reported 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) in the same period last year. The number of monthly active users rose by 14% year-over-year, reaching 626 million.
“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,” said CEO Daniel Ek in a statement. He noted that the company is achieving its success faster than anticipated, which is promising for its future.
Following the release of its earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Beginning this month, individual plan users will pay $12 (up by $1), Duo plan users will pay $17 (up by $2), and Family plan users will pay $20 (up by $3). This marked the first membership cost increase in 13 years, with an average rise of $1 implemented last July.
Notably, despite these price hikes, Spotify added seven million net subscribers in the last quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with users showing the least likelihood of canceling their memberships compared to other streaming services, according to a Bloomberg analysis.
However, the company’s financial performance has faced challenges. In 2022, Spotify’s stock lost over two-thirds of its value as it navigated multiple quarters of operating losses. In January 2023, the company announced a workforce reduction of 600 employees and later cut 1,500 jobs, accounting for approximately 17% of its total staff.