Spotify has announced another record profit quarter, just a year after it increased the prices of its Premium subscription plans for the first time in history. The Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million) in the second quarter, a notable improvement from a loss of 247 million euros ($268 million) in the same period last year. The company also saw a 14% annual increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for 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 this encouraging earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium offerings in the U.S. Starting this month, individual subscription plans will see a $1 increase, costing $12; Duo plans will increase by $2 to $17; and Family plans will rise by $3 to $20. This move follows an average $1 hike in membership costs implemented last July, which was the first increase in 13 years.
Despite the price hikes, Spotify managed to add seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are reported to be the least likely among streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
Historically, however, Spotify has struggled with its financials, losing more than two-thirds of its stock value in 2022 amid a series of operating losses. In January 2023, the company announced it would be reducing its workforce by 600 employees and less than a year later, it cut 1,500 jobs, amounting to approximately 17% of its staff.