Spotify has announced another record profit quarter, marking a significant achievement just a year after it increased prices for its Premium subscription plans for the first time ever.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a notable improvement from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users has also risen by 14% year-on-year, reaching a total of 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not just a great product, but increasingly a great business,” stated CEO Daniel Ek. He added that their progress has surpassed even their expectations, indicating a positive outlook for the future.
Following the announcement of its stronger-than-expected earnings, Spotify’s stock surged nearly 14% during pre-market trading on Tuesday.
In June, the company revealed plans to increase prices for Premium users in the U.S. Starting this month, individual plan subscribers will see a $1 increase to $12, Duo plan subscribers will pay $2 more, bringing their total to $17, and Family plan users will experience a $3 hike to $20. This change comes after Spotify raised its membership prices by an average of $1 for the first time in 13 years last July.
Despite these price hikes, Spotify successfully added seven million net subscribers in the quarter, exceeding its previous expectations by one million.
As the leading audio streaming platform globally, Spotify users are reported to be the least likely among major streaming services to cancel their memberships, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds as it dealt with multiple quarters of operating losses. In January 2023, the company announced a reduction of 600 positions and later cut about 1,500 jobs, amounting to roughly 17% of its workforce.