Spotify has announced another quarter of record profits, marking a significant change since it raised the prices of its Premium plans for the first time ever a year ago.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the number of monthly active users rose 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, which 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, Spotify announced a price increase for Premium users in the U.S. Starting this month, individual plan users will see an increase of $1 to $12, Duo plan users will face a $2 hike to $17, and Family plan users will pay $3 more, totaling $20. This price adjustment followed the company’s first membership cost increase in 13 years, which averaged $1 last July.
Despite these higher prices, Spotify gained seven million net subscribers in the quarter, exceeding its guidance by one million.
As the leading audio streaming service globally, Spotify’s users are among the least likely to cancel their subscriptions, according to analysis by Bloomberg.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock value plummeted by more than two-thirds, primarily due to consecutive quarters of operating losses. Earlier this year, the company announced layoffs of 600 employees, followed by an additional reduction of 1,500 jobs, approximately 17% of its workforce.