Spotify has reported another quarter of record profits, one year after it first increased the prices of its Premium plans. In the second quarter, the Swedish audio streaming company achieved an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) the previous year. Additionally, the platform saw a 14% year-over-year increase in monthly active users, 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. “We are doing so on a timeline that has exceeded even our own expectations, and this all bodes very well for the future.”
Following the release of its favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium services in the U.S. Starting this month, individual plan users will pay an additional $1 (totaling $12), Duo plan users will see a $2 increase (totaling $17), and Family plan users will pay $3 more (totaling $20). Last July marked the first price increase in 13 years, with an average increase of $1 for memberships.
Despite the price increases, Spotify added seven million net subscribers during the quarter, exceeding its previous forecast by one million.
Spotify remains the leading audio streaming service globally, with users showing the least likelihood of canceling their subscriptions compared to other major audio and video streaming platforms, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock value decreased by more than two-thirds due to several quarters of operating losses. In January 2023, the company revealed plans to lay off 600 employees, and less than a year later, it made further cuts, reducing its workforce by approximately 1,500 employees, or 17% of its staff.