Spotify has announced another quarter of record profits, marking one year since it first raised the prices of its Premium subscriptions. The Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. Additionally, the number of monthly active users grew by 14% year-over-year, 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced new price increases for its Premium users in the U.S., which went into effect this month. Individual plans will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. Last July, Spotify raised membership costs for the first time in 13 years by an average of $1.
Despite the price hikes, Spotify managed to add seven million net subscribers in the last quarter, exceeding its prior guidance by one million.
As the leading audio streaming service globally, Spotify’s users have shown a lower likelihood of canceling their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial situation was not always so positive. In 2022, Spotify’s stock plummeted by over two-thirds due to several quarters of operating losses. Earlier this year, the company laid off 600 employees and later cut 1,500 jobs, amounting to roughly 17% of its workforce.